2025-VIL-1935-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - Works Contract Services, Exemption, Statutory Authority – Appellant was engaged in providing Works Contract Services to the Rajya Krishi Utpadan Mandi Parishad (Mandi Parishad) and Kanpur Development Authority (KDA). The appellant claimed exemption from payment of service tax under various entries of Notification No. 25/2012-ST dated 20.06.2012 - Whether the exemption from payment of service tax in respect of services provided by the appellant to Mandi Parishad and KDA during 2016-17 and 2017-18 (upto June 2017) for construction work under Works Contract would be available under Sl. No. 12, 13 & 25 of Notification No. 25/2012-ST dated 20.06.2012 – HELD - The Mandi Parishad is a statutory authority created under the Uttar Pradesh Krishi Utpadan Mandi Adhiniyam, 1964. However, the activities carried out by the Mandi Parishad are of a commercial nature and not solely for the benefit of the public. The construction of shops, auction platforms, parking, canteen, godowns, etc. for the Mandi Parishad cannot be considered as "original works meant predominantly for use other than for commerce, industry, or any other business or profession" as required under the exemption provisions. Therefore, the department's view that the appellant is not entitled to the exemption claimed under Sl. No. 12, 13 & 25 of Notification No. 25/2012-ST, is upheld - The appeal is partly allowed by upholding the demand of service tax on the Works Contract Services provided to Mandi Parishad and KDA, and the Security Agency Services received by the appellant under the RCM. The demand is set aside on services received from individual truck owners under the reverse charge mechanism and the Legal Services. The late fees, interest, and penalty imposed on the appellant is upheld – The appeal is partly allowed - Whether the exemption from payment of service tax is available on the services received by the appellant under the reverse charge mechanism – HELD - The services received by the appellant from Goods Transport Agencies (GTA) are subject to service tax under the reverse charge mechanism. However, the appellant had already paid service tax on the services received from individual truck owners, who are not considered as "Goods Transport Agencies" under the definition. Therefore, the matter is remanded back to the original authority to re-compute the demand by limiting it to the services received from the Goods Transport Agencies only. The demand of service tax under RCM on the Security Agency Services received by the appellant is upheld. However, the demand on the Legal Services is set aside, as the appellant had established that the payments were made to the Chartered Accountant for the statutory audit of the books of accounts.
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