The Kolkata CESTAT held that all the services rendered to the ‘Government Authority’ are not exempted from payment of service tax.
The Tribunal opined that Only those services which are entrusted to a Municipality, if carried out by a service provider then such services alone are exempted from service tax.
The Appellant 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.
In the order, the Ld. Commissioner (Appeals), has confirmed the demand 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.
Aggrieved against the confirmation of the demand, the Appellant has filed the present appeal.
In their grounds of appeal, the Appellant stated that SBPDCL is a Govt. of Bihar Undertaking and is incorporated under the Companies Act, 1956.
The Appellant states that for the purposes of the present case, SBPDCL is also a Government Authority as defined under clause 2(s) of the Notification No. 25/2012-ST dated 20.06.2012 as it is under the control of Govt. of Bihar and hence the services provided by the Appellant to SBPDCL will be exempt from service tax.
The Appellant further states that the extended period of limitation cannot be invoked since there was no fraud, collusion or any wilful misstatement or suppression of facts, or contravention of any of the provisions of this Act or of the Rules made with intent to evade payment of tax. The Appellant also states that the extended period of limitation under proviso to section 78 of the Act can be invoked if suppression, wilful misstatement occurs due to deliberate evasion of duty on part of the assessee. Such an act must be deliberate. In taxation, it can have only one meaning that the correct information was not disclosed deliberately to avoid payment of duty. Accordingly, they contended that the demand confirmed in the impugned order is not sustainable on the ground of limitation also.
The appellant reiterated the findings in the impugned order and stated that as per Notification 25/2012-ST dated 20.06.2012, services provided to a Government authority only to carry out any function entrusted to a municipality under Article 243W of the Constitution.”alone exempted under the Notification. In the present case, the appellant were entrusted with the work of supply of materials and equipments, erection, testing and commissioning of 11KV line, 11/0.433 KV 63KVA D/S/S LT Line and providing 30 service connection including energy meter on TURNKEY basis to the state tube wells under NABARD Phase VIII and works of similar nature in the State of Bihar.
The issue raised was whether SBPDCL are a ‘Government Authority’ or not, as defined in clause 2(s) of the Notification No. 25/2012-ST dated 20.06.2012?
The CESTAT held that SBPDCL is a ‘Government Authority.
Case Title: M/s Vrindavan Construction Versus Commissioner (Appeals), CGST & Central Excise, Patna