2025-VIL-1958-CESTAT-BLR-ST
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SERVICE TAX CESTAT Cases

Service Tax – Taxability of Construction of dams and power houses, Limitation period for refund claims – Appellant executed construction work related to dams, including the Nagarjuna Sagar Tail Pond project and the construction of the Almaty Dam Power House. During an audit, the revenue authorities insisted that the appellant was liable to pay service tax for these construction activities, as they were not considered part of the dam construction. The appellant paid the demanded service tax along with interest. Thereafter, the appellant filed a refund claim, which was rejected by the adjudicating authority and the Commissioner (Appeals) - Whether the construction activity related to dams is exempt from payment of service tax – HELD - The Tribunal relied on the decisions in the cases of Continental Constructions Ltd. v. Commissioner of Service Tax, M/s C P Systems Pvt. Ltd. v. Commissioner of Service Tax, and M/s MCM Service Pvt. Ltd. v. Commissioner of Service Tax, wherein it was held that the construction of power houses and other structures that are integral to the dam project are also exempt from service tax, as they are considered part of the dam construction - The exclusion of dams and tunnels from the definition of "Commercial or Industrial Construction Services" would cover all the works related to the civil construction of dams and tunnels, including the construction of power houses. Therefore, the construction activities undertaken by the appellant are exempt from service tax - The impugned order is set aside and the appeal is allowed on merit. The original authority is directed to process the refund claim as per Section 11B of the Central Excise Act, 1944 – Ordered accordingly - Whether the amount paid as service tax based on the audit instructions can be considered as a deposit – HELD - In the present case the service tax has been paid under the respective heads accepting the observations of the audit. Once the tax is paid under the relevant provisions of the law, it cannot be considered as a deposit, and the refund can only be claimed under the provisions of Section 11B of the Central Excise Act, 1944, as made applicable to service tax. The tax paid by the appellant cannot be treated as a deposit, and the refund claim has to be filed within the time limit prescribed under the law.
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