Order Date – 25 April 2023

Parties: Progressive Constructions Ltd. Vs Commissioner of Service Tax, Hyderabad – Service Tax 

Facts – 

• The Appellant, Progressive Constructions Ltd. is an infrastructure company wherein they mostly provided the Works Contract services to various clients.
• Investigation was taken up on their activities and a Show Cause Notice was issued on account of demands for the period 01.06.2007 to 13.09.2011 on Construction of canals, water pipeline works, Road works, earthwork and works to NTPC, on GTA services etc.

Issue – 

• Whether the appellant is liable to pay service tax?

Order – 

• The Tribunal observed that the works undertaken by the appellant are on account of various canal and other pipeline projects undertaken by them by way of Tender and Contract awarded by the Government of Andhra Pradesh. There is no dispute that the works have been rendered only to the Government of Andhra Pradesh.
• It was held that the issue in the present Appeal is no more res integra and is fully covered by the decision of The Larger Bench in the case of Lanco Infratech Ltd vs. CCE & ST, Hyderabad [2015 (38) S.T.R. 709 (Tri. - LB)], in the case of Vishwa Infrastructure & PvtLtd.,Vs CCE& ST Hyd-II [2019 (229) GSTL 352 TRI-Hyd]. held that the work done by the appellant in the nature of turnkey/EPC projects for Governments with respect to laying of pipes for water supply/sewerage is covered by explanation (ii)(b) of Section 65 (105) zzzza and is not exigible being not for commerce or industry. Consequently, the demand of interest and penalties are liable to be set aside and we do so
• Hence it set aside confirmed demand, interest and penalty in respect of Service Tax demand on construction of canals and water pipelines works etc., carried out for the State Government along with interest and penalty thereof for the 12 projects.
• The Tribunal remanded the confirmed demand.