Service Tax
TRT-2025-
Cestat Kolkata
Date:-29-08-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 29 August 2023
Parties: M/s Vrindavan Construction Vs Commissioner (Appeals), CGST & Central Excise, Patna
Facts –
- The Appellant, M/s Vrindavan Construction, has provided Works Contract Service to M/s Bharti Infratel Ltd and M/s. Lamco Industries (P) Ltd and also to Govt. of Bihar vide M/s South Bihar Power Distribution Company Ltd. during the period 2013-14 to 2016-17.
- Demand was proposed on the work undertaken by the Appellant for SBPDCL on the ground that SBPDCL doesn’t qualify the definition of 'Government Authority' as defined under clause 2(s) of the Notification No. 25/2012-ST dated 20.06.2012 for the period 2014-15 to 2016-17.
- The demand was confirmed and being aggrieved the appellant filed an appeal.
Issue –
- Whether SBPDCL is qualify under the definition of Government Authority or not and whether the works carried out are specified as a function entrusted to a Municipality under Article 243W of the Constitution of India?
Order –
- The Tribunal observed that the Company is subsidiary of Bihar State Power (Holding) Company Limited which holds 100% of shares in the company. The administrative set up of Bihar State Power (Holding) Company Limited indicates that it is wholly owned by Government of Bihar. Thus, it was held that SBPDCL falls within the ambit of the definition of 'Government Authority' as provided under Clause 2(s) of the Notification No. 2/2014-S.T. w.e.f. 30-1-2014.
- Further, the above works carried out by the Appellant would qualify under 'Planning for economic and social development' as defended under 12th Schedule to Article 243W of the Constitution of India. The scope of this Entry is wide enough to cover the tube well energization work undertaken by the Appellant.
- Thus, it was held that the activities undertaken by the Appellant are covered within the ambit of the works assigned under Article 243W of the Constitution to be carried out by the Municipalities. Accordingly, it was held that the appellant are eligible for the exemption provided under Notification 25/2012-ST dated 20.06.2012.
- Hence the demand confirmed in the impugned order is not sustainable. Since the duty itself is not sustainable, the question of demanding interest and imposing penalty does not arise. The appeal is allowed.
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