2026-VIL-877-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Construction of Roads in Private Industrial Park – Exemption from Service Tax and CENVAT Credit Eligibility – Construction services for development of industrial park with internal roads connecting to existing public roads as per approved master plan – CENVAT Credit on input services used for road construction after paying service tax under partial reverse charge, treating the work as 'Original Works' with 60% abatement – Dept denied CENVAT Credit as an ineligible input service - Whether roads constructed within a private industrial park, which are integrated with the public road network and serve general public access, qualify as roads for use by general public under the exemption notification, thereby making the service provider ineligible to claim CENVAT Credit on input services – HELD - Merely because roads are constructed inside a private industrial park does not render them private roads with restricted entry; the fact that roads are crossed by master plan routes and connected with existing public roads means they are for utility of general public and consequently fall within the scope of exemption notification for construction of roads for use by general public. The fact that roads in question are for the utility of the general public the same would fall within the scope of the exemption Notification No.25/2012–ST dated June 20, 2012 and therefore, the appellant is not entitled to take CENVAT Credit of service tax on the exempted services as per the provisions of Rule 6 of CENVAT Credit Rules, 2004 - The impugned order is upheld on merits regarding exemption applicability but remands the matter for recalculation of recoverable CENVAT Credit for the normal period only, setting aside the extended period of limitation as the issue involves interpretation rather than suppression of facts – The appeal is partly allowed - Demand invoking extended period on the ground that the appellant had suppressed the fact of wrongful availment of CENVAT Credit – HELD - The appellant bonafide believed that the roads built by them were for specific use for Industrial Park and therefore, would fall in the category of private use, which is beyond the scope of the applicability of the exemption notification. In fact the appellant would have benefited by availing the exemption from payment of service tax under the Notification. By not claiming the exemption under the notification, they paid the service tax and if service tax was not payable, in the event the Department would have been liable to refund the said amount with interest. Therefore, it would have been a case of revenue neutral rather than a case of suppression of facts.
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GSTAT Appeal filed wrongly...
By CA Vivek Jalan

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