2026-VIL-1865-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax - Exemption for construction of Pakka Ghat on river bank - Entry 12(d) of Notification No. 25/2012-ST - Appellant constructed a Pakka Ghat on the bank of a river for the Flood Work Division of the Irrigation Department and claimed exemption under Entry 12(d). The Commissioner denied the exemption holding that construction of a Pakka Ghat does not fall in the category of canal, dam or other irrigation work, and confirmed the demand - Whether the construction of Pakka Ghat at the bank of a river is exempt under Entry 12(d) of Notification No. 25/2012-ST - HELD - Entry 12(d) exempts services provided to the Government by way of construction, repair etc. of canal, dam or other irrigation work. A certificate from the Superintending Engineer of the Flood Work Division certified that the work was carried out at the river bank to avoid erosion of the dam. Construction of a Pakka Ghat at the bank of a river to avoid erosion of the dam is an activity in relation to construction or repair of a dam - The Appellant was eligible for exemption under Entry 12(d) and the demand is set aside - Construction of medical college as sub-contractor - Entry 12(a) of Notification No. 25/2012-ST and extended period - Appellant constructed a medical college as sub-contractor on back to back basis under the main contractor, believing the work to be exempt under Entry 12(a), and did not charge Service Tax. The main contractor had paid Service Tax on the same service. The Commissioner denied the exemption and confirmed the demand - Whether the Appellant is eligible for exemption under Entry 12(a), whether it is liable to pay Service Tax when the main contractor has already paid it, and whether the extended period could be invoked - HELD - The exemption under Entry 12(a) had been withdrawn with effect from 01.03.2015 and was not available to the Appellant. Although there were several decisions that Service Tax paid by the main contractor need not be paid by the sub-contractor, the issue has finally been decided against the Appellant by the Larger Bench, which held that in the absence of an exemption the sub-contractor is liable to pay Service Tax even if the main contractor has discharged the liability. In view of the conflicting decisions on the issue, the extended period of limitation could not have been invoked - The demand is set aside on the ground of limitation - Civil work for flood security and restriction of river diversion - Entry 12(d) of Notification No. 25/2012-ST - Appellant executed flood protection work for the Irrigation Drainage Division and claimed exemption under Entry 12(d). The Adjudicating Authority denied the exemption as the agreement was not submitted and the letter on record was of an earlier year, so that there was no co-relation with the amounts received in the later years - Whether the exemption under Entry 12(d) is available for civil work relating to flood security - HELD - The letter and the work schedule show that the Irrigation Department assigned the job of flood security, and the contract period was later extended by a subsequent letter. The payments received are therefore fully co-related with the contract. The services were admittedly provided to the Government in relation to flood security, and are covered under Entry 12(d), which exempts construction services relating to canal, dam and other irrigation work - The Appellant was eligible for exemption and the demand is set aside - Construction of concrete pathway and parking at river front - Entry 13(a) of Notification No. 25/2012-ST - Appellant constructed a concrete pathway and parking at the bank of a river and claimed exemption under Entry 13(a). The Commissioner denied the exemption holding that a pathway and parking cannot be considered a public road - Whether the construction of concrete pathway and parking is exempt under Entry 13(a) - HELD - A certificate of the Superintending Engineer of the Irrigation Department certified that the pathway is in the nature of a public road used by tourists and the general public. Construction of a concrete pathway is nothing but a public road, and Entry 13(a) grants exemption for construction or repair of a road for use by the general public - The Appellant was eligible for exemption and the demand is set aside - Interior decoration of office building of a development authority - Entry 12A(a) of Notification No. 25/2012-ST - Appellant carried out interior decoration of the office building of a development authority and claimed exemption under Entry 12A(a). The Commissioner denied the exemption since the work was not an original work - Whether the interior decoration of the office building is exempt under Entry 12A(a) - HELD - Entry 12A(a) exempts services provided to the Government, a local authority or a governmental authority by way of construction, erection, fitting out, repair, maintenance, renovation or alteration of a civil structure meant predominantly for use other than for commerce, industry or any other business or profession. There was no dispute that the development authority is a governmental authority. The activity of interior decoration is in the nature of repairing of a civil structure - The Appellant was exempted under Entry 12A(a) and the demand is set aside - Laying of cobble stone on road - Entry 13(a) of Notification No. 25/2012-ST - Appellant laid cobble stone on roads and claimed exemption under Entry 13(a). The Commissioner denied the exemption since the contract was unsigned and the ledger was in the name of the PWD Electric Division whereas the contract mentioned another circle - Whether the work is exempt under Entry 13(a) - HELD - The bond and work schedule were duly signed by the PWD officers. The contract involved shifting of electric poles, handled by the electric division, and laying of cobble stone on the road, and the amount was therefore received from the electric division and accounted for in that name. The entire work is related to construction or repair of a public road - The Appellant was eligible for exemption and the demand is set aside - Beautification of road in a residential scheme - Entry 13(a) of Notification No. 25/2012-ST - Appellant carried out upgradation and beautification of a road in a housing scheme developed by the Avas Vikas Parishad and claimed exemption under Entry 13(a). The Commissioner denied the exemption holding that the road is not meant for the general public - Whether the road is a road for use by the general public under Entry 13(a) - HELD - There was no basis for the Commissioner to opine that the road is not meant for the general public. The scheme is developed in a huge area with thousands of houses, and the map shows that the road is a part of it. These are not roads in a factory or residential complex which are taxable. The road cannot be considered a private road - Exemption under Entry 13(a) is allowable and the demand is set aside - Widening and strengthening of road as sub-contractor - Entry 13(a) of Notification No. 25/2012-ST - Appellant was sub-contracted part of the widening and strengthening of a road contract awarded by the PWD and claimed exemption under Entry 13(a). The Commissioner denied the exemption as the contract was unsigned and the ledger and voucher described the work differently - Whether the exemption under Entry 13(a) is available - HELD - The invoice, the ledger account and the certificate of the main contractor show that the amount was paid towards construction of a public road. The area mentioned in the voucher lies on the road mentioned in the contract, and there is no contradiction - The Appellant was eligible for exemption and the demand is set aside - Construction of approach road to godown as sub-contractor - Entry 13(a) of Notification No. 25/2012-ST - Appellant was sub-contracted on back to back basis the construction of approach roads to the godowns of a State Warehousing Corporation and claimed exemption under Entry 13(a). The Com
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