BRAHMPUTRA INFRASTRUCTURE LTD. Vs. COMMR. OF SERVICE TAX

JUDGEMENT

(1.) THE facts leading to filing of these appeals and stay applications are, in brief, as under : - -

(2.) SHRI A.K. Batra, CA., ld. Counsel for the appellants, pleaded that the work of Open Excavation of Surface Power House & Tail Pool at the Project being executed by M/s. L&T Ltd. is the work in course of construction of a Hydroelectric dam as tail pool is a tunnel constructed below the surface area, that leads water from power house to river and power house is a closed heavy physical structure constructed below the surface when turbines are located that in a hydro electric dam project, power house and tail pool constitute an integral part in course of construction of the hydro -electric dam structure to hold back the water and generate electricity that in view of this, the services provided to M/s. L&T Ltd. would be exempt from Service Tax under exemption Notification No. dated 7 -6 -2005, which exempts site formation and clearance, excavation and earthmoving and demolition services and such other similar activities referred to in sub -section (1) of Section 65(105)(zzza) of Finance Act, 1994 provided to any person by another person in the course of construction of roads, airports, railways, transport terminals, bridges, tunnels, dams, ports from the whole of the Service Tax leviable thereon, that the department's contention that the job of open excavation of surface power house and tail pool is not in course of construction of dam but is the job in course of execution of a Hydro -electric power project is not correct, that the Commissioner has grossly erred in denying the exemption under notification No. on the ground that the activity undertaken by the appellant in respect of the project of M/s. L&T Ltd. is not in course of construction of dam, but is in the process of construction of dam, that this finding of the Commissioner is absolutely incorrect; that the services provided to WBH1DC, as is clear from the work order placed by the service recipient, involve filling a low lying area with earth to make the same suitable for housing projects and the requisite quantity of earth was to be procured from places not more than 8 kms from the work site, preferably from Bheries (fish ponds), that this service provided to WBHIDC involves dredging of fish ponds so as to desilt them and using the earth for filling up low lying areas to make them suitable for housing projects to be undertaken by the Government of West Bengal, that this service is a composite service of restoration of Bheries (fish ponds) by dredging and hence no Service Tax would be leviable on the value of the service for restoring of the bheries, that in the show cause notice dated 30 -9 -2010, in respect of which the Service Tax demand of Rs. 1,72,76,204/ - has been confirmed, an amount of about Rs. 90 lakhs is in respect of the services provided to M/s. L&T Ltd. which are exempt from Service Tax under notification No. and only the remaining demand of about Rs. 80 lakhs is in respect of the services provided to WBHIDC, a major portion of which is in respect of restoration of bheries, which is not taxable, that the show cause notice dated 14 -9 -2011 for demand of Service Tax of Rs. 3,11,34,335/ - for the period 1 -4 -2005 to 31 -3 -2007 in respect of the services provided to M/s. L&T and WBHIDC is time barred, as this demand would survive only if the extended period under proviso to Section 73 is invokable, and the same is not be invokable in view of the judgment of the Apex Court in the case of Nizam Sugar Factory reported in : 2006 (197) E.L.T. 465 (S.C.) : 2008 (9) S.T.R. 314 (S.C.) as on the basis of the same facts an earlier show cause notice dated 30 -9 -2010 for the period 1 -4 -2007 to 30 -3 -2009 had been issued by invoking extended limitation period and hence, all the facts were known to the department, and that as regards the show cause notices dated 11 -10 -2011 and 8 -10 -2012 for demand of Service Tax of Rs. 49,63,761/ - and Rs. 3,63,417/ - respectively, Service Tax demand confirmed in respect of these show cause notices also include the Service Tax demanded on the amount charged for dredging of the fish pond which is not taxable. Shri Batra, therefore, pleaded that the appellant have strong prima facie case in their favour and hence, the requirement of pre -deposit of Service Tax demands, interest thereon and penalty may be waived for hearing of the appeals and recovery thereof may be stayed till the disposal of the appeals.

(3.) WE have considered the submissions from both the sides and perused the records.