Order Date – 05 April 2024

Parties: Jay Kishan Engineers Vs Commissioner of Central Excise & ST, Rajkot

Facts –

• The Appellant, are engaged in providing taxable services under the category of Construction service, Site formation, Clearance, Excavation and Earth moving and demolition services, Erection, Commissioning and Installation Service etc.
• During the course of audit it was observed that the appellant has not paid service tax on the services rendered by them to the main contractors for the period April 2007 to March 2009. Consequently a show casue notice was issued and the demand was confirmed.

Issue –

• Whether the appellant is liable to discharge service tax on the services rendered by them to the main contractors?

Order –

• The Tribunal observed that the work undertaken by the appellant for the main contractor namely M/s. KP Buildcom was for construction of boundary wall for Pipavav port, within the port area and civil work for erection of tower. Since the construction of boundary wall and tower within the port area are very much part of the port area therefore the provisions of Notification No. 25/2007-ST dated 22.05.2007 will certainly be applicable to the appellant being sub-contractor of the main contractor and therefore appellant shall not be liable to pay any service tax on such activity.
• Since the activity of construction of drainage pipeline for Municipal Corporation is not for commercial purpose and therefore, the construction activity pertaining to construction of drainage pipeline for Rajkot Municipal Corporation is not liable to service tax by virtue of the fact that same is not in the nature of commercial activity and therefore same is also not liable to service tax.
• Hence the appeal is allowed.