2026-VIL-1454-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - Exemption from Service Tax to Governmental Authorities - Statutory Interpretation of Entry No. 60 of Notification No. 25/2012-ST - Appellant provided works contract services by way of construction, repair and painting of shops pertaining to Mandi Samiti to the Rajya Krshi Utpad Mandi Parishad and Mandi Samiti, which are bodies corporate established under an Act of State Legislature - Revenue confirmed the demand of service tax on the ground that services rendered do not fall under the category of services mentioned in Entry No. 60 of Notification - Whether the works contract services provided to Governmental Authorities relating to marketing of agricultural produce are exempt from service tax under Entry No. 60 of Notification No. 25/2012-ST – HELD - The Mandi authorities qualify as Governmental Authorities as they are bodies corporate set up by an Act of the State Legislature and expressly deemed to be local authorities - The functions assigned to Panchayats under the eleventh schedule include agriculture and promoting agricultural extension - The Appellant's services relating to repair and painting of shops pertaining to Mandi Samiti facilitating marketing of agricultural produce fall within the ambit of Article 243G of the Constitution and are in relation to promoting marketing activity of agricultural produce by farmers – The Works contract services rendered by Appellant are exempted from payment of service tax as per Entry No. 60 of Notification No. 25/2012-ST dated 20.06.2012 - As the issue involves interpretation of statutory provisions and no allegation of suppression with intent to evade duty can be attributed to interpretation issues, and no evidence of suppression, fraud, collusion or misstatement has been adduced by the Department, the entire demand raised by invoking extended period of limitation is barred by limitation - For rent income received, as the gross taxable value is less than the prescribed threshold, the appellant is eligible for threshold exemption - The impugned order is set aside and the appeal is allowed
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