Ms Bahadur And Company vs CGST Varanasi

Court
Customs, Excise and Service Tax Appellate Tribunal

CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
ALLAHABAD

REGIONAL BENCH - COURT No.II

Service Tax Appeal No.70570 of 2020

(Arising out of Order-in-Original No.11-13/Commr/VNS/2020 dated
15/09/2020 passed by Commissioner of Central Excise & CGST, Varanasi)

M/s Bahadur And Company, …..Appellant
(Vill. & Post-Belhari, Audihar, Ghazipur-233221)
VERSUS
Commissioner of Central Excise &
CGST, Varanasi ….Respondent
(Commissionerate, Varanasi)

PPEARANCE
A :
Smt Vanashri Dube, Advocate for the Appellant
Shri Santosh Kumar, Authorised Representative for the Respondent


CORAM:
HON’BLE MR. P.A. AUGUSTIAN, MEMBER (JUDICIAL)
HON’BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)

FINAL ORDER NO.70317/2026

DATE OF HEARING : 31 July, 2026
DATE OF PRONOUNCEMENT : 01 September, 2026


SANJIV SRIVASTAVA:
This appeal is directed against order in original No 11-
13/Commr/VNS/2020/2518 dated 16.09.2020 of Commissioner
Central Goods & Service Tax & Central Excise Varanasi. By the
impugned order following has been held:
ORDER
1. I confirm the demand of Service Tax (including Cesses) of
Rs. 6,87,725/- (Rs. Six Lakh Seven Thousand Seven
Hundred Eighty Seventy Five only) upon the party i.e. M/s
Bahadur and Company, Vill. & Post Belhari, Audihar,
Ghazipur-233221 (U.P.) and order for the recovery of
same from the party;
2. I order for charging of interest on the above confirmed
demand of Service Tax (including Cesses) of Rs.

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2
6,87,725/-, from the party, under Section 75 of the
Finance Act, 1994;
3. I impose a penalty of Rs. 68,772/-, upon the party, under
Section 76 of the Act for not paying the above service tax
(including Cesses) of 6,87,725/-.
4. For their failure to obtain service tax registration, I impose
a penalty of Rs. 10,000/- (Rupees Ten Thousand only)
under the provisions of Section 77 (1) (a) of the Act, on
M/s Bahadur and Company, Vill. & Post - Belhari, Audihar,
Ghazipur - 233221 (U.P.).
5. I impose a further penalty of Rs. 10,000/- (Rupees Ten
Thousand only) under Section 77 (2) of the Finance Act,
1994 on the party for their failure to file ST-3 Returns for
the relevant period.
6. I also confirm the demand of Service Tax (including
Cesses) of Rs. 22,500/- (Rs. Twenty Two Thousand Five
Hundred only) upon the party i.e. M/s Bahadur and
Company, Vill. & Post - Belhari, Audihar, Ghazipur -
233221 (U.P.) and order for the recovery of same from the
party.
7. I impose a penalty of Rs. 2,250/-, upon the party, under
Section 76 of the Act for not paying the above service tax
(including Cesses) of Rs. 22,500/-
1.2 A corrigendum dated 05.11.2020 was issued to the
impugned order stating as follows:
Corrigendum to Order-in-Original No. 11-
13/Commr/Vns/2020/2518 dated 16.09.2020
The Sl.No. 6 of the order portion of the Order-in-Original
No. 11-13/Commr/Vns/2020/2518 dated 16.09.2020
issued from file C.No. VI(ST)Dem(12)Adj-72/2016 (at
page No. 38) may be read as follows-
"I also confirm the demand of Service Tax (including
Cesses) of Rs. 22,500/- (Rupees Twenty Two Thousand
Five Hundred only)" along with applicable interest under
Section 75 of the Finance Act, 1994 upon the party i.e. M/s
Bahadur and Company, Village & Post-Belhari, Audihar,

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3
Ghazipur-233221 (U.P.) and order for the recovery of
same from the party.”
1.3 Another corrigendum dated 24.11.2020 was issued to the
impugned order stating as follows:
Corrigendum to Order-in-Original No. 11-
13/Commr/Vns/2020/2518 dated 16.09.2020 and
Corrigendum dated 05.11.2020 (vide DIN-
20201153ZY000000FF2B)
The followings corrigendum are being made in the Order-
in-Original No. 11-13/Commr/Vns/2020/2518 dated
16.09.2020.
1. SI No. 1 of order portion, "I confirm….. from the party."
may be read as "I confirm the demand of Service Tax
(including Cesses) of Rs.12,57,670/-(6,87,725/- +
5,69,945/-) (Rupees Twelve Lakh Fifty Seven Thousand
Six Hundred and Seventy only) upon the party i.e. M/s
Bahadur and Company, Village & Post-Belhari, Audihar,
Ghazipur-233221 (U.P.) under Section 73 of the Finance
Act, 1994."
2. At Sl No. 2 of order portion, the amount may be read as
Rs.12,57,670/-(6,87,725/- + 5,69,945/-) (Rupees
Twelve Lakh Fifty Seven Thousand Six Hundred and
Seventy only) instead of Rs. 6,87,725/-(Rupees Six
Lakh Eighty Seven Thousand Seven Hundred Seventy
Five only).
3. At Sl No. 3 of order portion, the penalty amount may be
read as Rs.1,25,767/-instead of Rs. 68,772/- and
Service Tax (including Cesses) amount may be read as
Rs.12,57,670 instead of Rs. 6,87,725/-.
4. Sl No. 6 of order portion, "I also confirm........from the
party." may be read as "I also confirm the demand of
Service Tax (including Cesses) of Rs.22,500 (Rupees
Twenty Two Thousand and Five Hundred only) upon the
party i.e. M/s Bahadur and Company, Village & Post-
Belhari. Audihar, Ghazipur-233221 (U.P.) under Section
73 of the Finance Act, 1994.”

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4
2.1 Appellant was engaged in providing taxable services of Works
Contract to various authorities and received consideration for the
services provided. For the services provided appellant did not
discharged their Service Tax liabilities as required under the
Finance Act, 1994 (hereinafter referred to as the "Act") read with
Service Tax Rules, 1994 (hereinafter referred to as the "Rules"
and has also not got themselves registered with the Central
Excise & Service Tax Department in terms of Section 69 of the
Act read with Rule 4 of the Rules.
2.2 Consequent upon examination of certain information and
records, it appeared that the party was engaged in providing the
taxable services of Work Contracts / Construction Services but
not discharging their service tax liabilities. Accordingly, a
Demand cum show cause notice bearing No.
15/Commr/Alld./2015 dt. 21-04-2015, was issued to appellant
vide C.No. VI(ST) Dem (12)-ADJ-42/2015/4304 dated 21-04-
2015 for short/ non payment of service tax on 'Works Contract
Service' rendered by them. The show cause notice was for
Rs.1,76,64,581-00 covering the period from 2009-10 (October,
2009) to 2013-14.
2.3 On scrutiny of the details provided by the appellant for the
subsequent period, it transpired that the appellant hprovided
taxable services to M/s Varanasi Development Authority,
Executive Engineer Construction Division U.P. Jal Nigam
Mughalsarai, Chandauli, Ganga Pradushan Niyantran Ikai, U.P.Jal
Nigam, Varanasi, E.E. Irrigation Dept. Varanasi, Bharat Coking
Coal Ltd, Dhanbad, Municipal Commissioner Nagar Nigam,
Varanasi etc. The scrutiny of documents also revealed that the
party has provided services of Construction of Cement Concrete
roads, Repairing of staff quarter, Repairing of canal, Construction
and repairing of dhobighat, construction of overhead tank under
work contract.
2.4 as per Notification No. 30/2012 dated 20/06/2012 as
effective from 01/07/2012 where the taxable service provided or
agreed to be provided by way of service portion in execution of
work contract by any individual, Hindu Undivided family or

Service Tax Appeal No.70570 of 2020
5
Partnership firm, whether registered or not, including association
of persons located in taxable territory to a business entity
registered as body corporate located in the taxable territory than
both provider of service as well as receiver of service shall be
liable for to the extent of 50% of service tax, separately. But in
the instant case the party as per details provided by them for
the year 2014-15, service receivers viz VDA, UP Jal Nigam,
Bharat Cooking Coal Ltd., Ganga Pradushan Niyantran Ikai,
Municipal Corporation & Irrigation department do not appear
business entity registered as body corporate and therefore in
these cases party shall be liable for 100% service tax.
Accordingly, the service tax (along with Ed. Cess and S.H. Cess)
liability of the party is as under :-
(Amount in ‘Rs)
Period Gross Amount
Received
Service Tax (inclusive of Edu Cess and SHE)
@ % Payable
2014-15
01.04.14-31.03.15
69779121 12.36 8624699
2015-16
01.04.15-31.05.15
7220827 12.36 892494
01.06.15-14.11.15
16076653 14.00 2250731
15.11.15-31.03.16
41403262 14.50 6003473
Total
64700742 9146698
2016-17 and 2017-18 (upto 30.06.2017)
01.04.16-31.05.16
18535697 14.50 2687676
01.06.16-31.03.17 101054485 15.00 15158173
01.04.17-30.06.16
32295709 15.00 4844356
Total 151885891 22690205
2.5 It was observed that the party was providing taxable
services under the category of Works Contract without obtaining
Service Tax Registration making themselves liable for penal
action under Section 77 of the Act. Further, it was apparent that
the party did not submit any half yearly return to the
department and thereby, contravened the provisions of Section
70 of the Act read with rule 7 of the Rules. Hence, liable for
imposition of penalty under Section 77 of the Act.

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6
2.6 As per Section 68 of the Act read with Rule 6 of the Rules
appellant was required to pay Service Tax on the value of
taxable Services received during any calendar quarter/ month, to
the credit of the Central Government by 5th (6th in case of e-
payment) of the month immediately following the said
quarter/month. As they have not paid service tax value of
taxable services provided during the period of dispute in
violation of Section 68 of the Act read with Rule 6 of the Rules,
the same was recoverable under Section 73(1) of the Act along
with interest under Section 75 of the Act. They are also liable for
penalty under Section 76 of the Act for contravention of the
provisions of Section 68 of the Act, read with rule 4 of the Rules.
2.7 A demand cum show cause notice dated 19.04.2016 was
issued to the appellant asking them to show cause as to why:
(a) Service Tax amounting to Rs. 86,24,699/- (Rs. Eighty Six
Lakh Twenty Four Thousand Six Hundred Ninety Nine
Only) (including Education Cess and Secondary and
Higher Education Cess) should not be demanded and
recovered from them under the provisions of proviso to
Section 73 (1) of Chapter V of the Finance Act, 1994
along with interest as applicable under Section 75 of the
Act, ibid.
(b) Penalty should not be imposed upon them under Section
77(1)(a) of Chapter V of the Finance Act, 1994 for
contravention of section 69 of the Act read with Rule 4 of
the Rules for default in taking registration.
(c) Penalty should not be imposed upon them under Section
77(2) of Chapter V of the Finance Act, 1994 for
contravention of section 70 of the Act read with Rule 7 for
each default for not filing the statutory return ST-3 within
due time and for contravention of Rule 5 & 6 of the Rules.
(d) Penalty should not be imposed upon them under Section
76 of Chapter V of the Finance Act, 1994 for not paying
service tax in accordance with the provisions of Section
68 of the Act read with Rule 4 of the Rules.

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7
2.8 Another demand cum show cause notice dated 11.04.2018
was issued to the appellant asking them to show cause as to
why:-
(a) Service tax amounting to Rs.91,46,698/- (Rs. Ninety One
Lakh Forty Six Thousand Six Hundred and Ninety Eight
only) (including applicable cesses) should not be
demanded and recovered from them under the provisions
of Section 73(1) of the Finance Act, 1994, as amended
along with interest as applicable under Section 75 of the
Act, ibid.
(b) Penalty should not be imposed upon them under Section
77 (1)(a) of Chapter V of the Finance Act, 1994 for
contravention of Section 69 of the Act read with Rule 4 of
the Rules for default in taking registration.
(c) Penalty should not be imposed upon them under Section
77(2) of Chapter V of the Finance Act, 1994 for
contravention of Section 70 of the Act read with Rule 7 of
the Rules for each default, for not filing the statutory
returns (ST-3) within due time.
(d) Penalty should not be imposed upon them under Section
76 of Chapter V of the Finance Act, 1994 for not paying
service tax in accordance with the provisions of Section
68 of the Act read with Rule 6 of the Rules.
2.9 Another demand cum show cause notice dated 23.04.2019
was issued to the appellant asking them to show cause as to
why:
(a) Service tax amounting to Rs. 2,26,90,205/- (Rs. Two
Crores Twenty Six Lakh Ninety Thousand Two Hundred
and Five only) (including applicable cesses) should not be
demanded and recovered from them under the provisions
of Section 73(1) of the Finance Act, 1994, as amended
along with interest as applicable under Section 75 of the
Act, ibid.
(b) Penalty should not be imposed upon them under Section
77 (1)(a) of Chapter V of the Finance Act, 1994 for

Service Tax Appeal No.70570 of 2020
8
contravention of Section 69 of the Act read with Rule 4 of
the Rules for default in taking registration.
(c) Penalty should not be imposed upon them under Section
77(2) of Chapter V of the Finance Act, 1994 for
contravention of Section 70 of the Act read with Rule 7 of
the Rules for each default, for not filing the statutory
returns(ST-3) within due time.
(d) Penalty should not be imposed upon them under Section
76 of Chapter V of the Finance Act, 1994 for not paying
service tax in accordance with the provisions of Section
68 of the Act read with Rule 6 of the Rules.
2.10 All the three demand cum show cause notices have been
adjudicated by the impugned order.
2.11 Aggrieved by the part of the order confirming the demands
against them along with interests and penalties imposed,
appellant has filed this appeal.
2.12 Appellant also filed Miscellaneous Application
(ST/Misc/70197/DB) to put on record certain documents which
were not placed before the original authority and were not filed
along with the appeal.
3.1 After allowing the miscellaneous application, with the
consent of both the sides the appeal was heard and taken for
consideration.
3.2 We have heard Ms Vanashri Dubey, Advocate for the
appellant and Shri Santosh Kumar, Authorized Representative
for the revenue.
3.3 Arguing for the appellant learned counsel submits that-
 The appellant has provided services in respect of repair of
the residential quarters on deep seated land n WJ area,
Moonidih, BCCL (Half Part)
 These services have been provided to Bharat Coking Coal
Limited which is a government authority and hence these
services are exempt from payment of Service tax as per
the Notification No 25/2012-ST dated 20.06.2012.

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9
 The fact with regards to Bharat Coking Coal Limited, being
government authority is established in terms of documents
submitted by her along with the Miscellaneous Application.
 The demand made in respect of services provided during
period 2014-15 for an amount of Rs 51,81,151/- has been
confirmed for the reason that the appellant has failed to
produce the documents to establish that these services
provided were exempt from payment of service. In fact
these services were provided to Executive Engineer
Irrigation Department and were for construction of Road
and for Protection of Narva Ghat of Right Bank of River
Ganga. The same services have been held exempted for
the subsequent period by the impugned order.
 Though the services provided to Siheevinayak Infravillage
Private Limited were in relation to construction of road
they do not have any document or cannot produce any
document in respect of these services.
3.4 Authorized representative reiterates the findings recorded
in the impugned order.
4.1 We have considered the impugned order along with the
submissions made in appeal and during the course of arguments.
4.2 Impugned order for confirming the part of demands
records as follows:
“5.9 Now, I proceed to examine the taxability of amount
received by the party from the Executive Engineer,
Irrigation Department, Varanasi. I find that the party has
received Rs. 2,07,30,724/-, during the period from 2014-
15 to 2017-18 (upto June, 2017), in the following manner:
2014-15 2015-16 2016-17 2017-18
(Upto June,
17)
TOTAL
EE IRRIGATION
DEPARTMENT VARANASI
51,81,151/- 39,24,272/- 88,35,117/- 27,90,184/- 2,07,30,724/-
5.9.1 In this regard, the party have submitted that they
have provided the work contract service amounting to Rs
51,81,151.00 for repairing of Canal during FY 2014-2015,
work contract service amounting to Rs 39,24,272.00 for

Service Tax Appeal No.70570 of 2020
10
construction of Ghat at left bank of River Karamnasa and
development of destination tourism at village Dewal at
District Ghazipur during FY 2015-2016 and work contract
service amounting to Rs 1,16,25,301.00 for construction of
Baba Keena Ram Ghat at left bank of River Karamnasa and
development of destination tourism at village Dewal at
District Ghazipur during FY 2016-17 & FY 2017-18 (Up to
June 2017). The party claimed exemption as provided in
point No 12 (d) and (a) of Notification no 25/2012-ST
dated 20.06.2012. The party also furnished copies of
agreements made with Executive Engineer, Irrigation
Department, Varanasi as per details given below:
For year 2014-15: No contract/agreement/work
order, in respect of receipt of Rs. 51,81,151/-, has
been submitted by the party.
For year 2015-16:
Name of Employer Work order No Amount Received/
Gross Turnover
39,24,272.00
EE Irrigation Department,
Varanasi
03/SE/14-15 DT.
11.02.2015

Work
Order No
Description of work Annexure
No.
5

03/SE/14-
15 DT.
06.02.2015
Baba Keenaram Ghat at feft bank of River
Karamnasa and development of destination
tourism at village Dewal at District Ghazipur
For year 2016-17 & 2017-18 (upto June, 17):
Name of Employer Work order No Amount Received/Gross Turnover
F.Y. 2016-17 F.Y. 2017-18
(Up to June
2017)
Total
Executive Engineer,
Irrigation & Water
Resources Department,
Varanasi
03/SE/2014-15
Dated
11.02.2015
88,35,117.00 27,90,184,00 1,16,25,301.00

Work Order No Description of work Annexure
No.
03/SE/2014-15
Dated
11.02.2015
Baba Keenaram Ghat at left bank of River
Karamnasa and development of destination
tourism at village Dewal at District Ghazipur
6
As regards taxability of above amount, I find that by virtue
of Point no. 12 (a) of Notification No. 25/2012-ST dated

Service Tax Appeal No.70570 of 2020
11
20.06.2012, government has exempted the work contract
services provided to the Government, a local authority or a
governmental authority by way of construction, erection,
commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of Canal, dam or
other irrigation works.
The relevant portion of the notification is reproduced as
below:
12. Services provided to the Government, a local authority
or a governmental authority by way of construction,
erection, commissioning, installation, completion, fitting
out, repair, maintenance, renovation, or alteration of-
(a) a civil or any other original work meant predominantly
for use other than for commerce, industry or any other
business or profession.
(b) a historical monument, archaeological site or remains
of national importance, archaeological excavation, or
antiquity specified under the Ancient Monuments and
Archaeological Sites and Remains Act, 1958 (24 of 1958);
(c) a structure meant predominantly for use as (i) an
educational, (ii) a clinical, or(iii) an art or cultural
establishment; or
(d) canal, dam or other irrigation works;
(e) pipeline, conduit or plant for (i) water supply (ii) water
treatment, or (iii) sewerage treatment or disposal; or
(f) a residential complex predominantly meant for self-use
or the use of their employees or other persons specified in
the Explanation 1 to clause (44) of section 65 B of the said
Act;
In respect of party's claim of exemption for the year 2014-
15, in the above category, I find that the party has
admitted to have received 51,81,151/- from the Executive
Engineer, Irrigation Department, Varanasi, for repairing of
canal, but they have not produced any bill, contract,

Service Tax Appeal No.70570 of 2020
12
agreement or work order, in support of their claim of
exemption. Hence, I find that the claimed exemption
cannot be granted to party.
As regards party's claim in respect of receipt for the year
2015-16, 2016-17 and 2017-18 (upto June, 17), the party
has submitted the copy of Work Order No. 03/SE/14-15
DT. 06.02.2015. On going through the same I find that the
same has been executed between the party and Irrigation
& Water Resource Department, Government of Uttar
Pradesh and on going through the same I find that that all
the works are related to "CONSTRUCTION OF GHAT"
provided to Irrigation and Water Resources Department,
Government of Uttar Pradesh, covered under the definition
of Government. Thus, find the same exempted from levy
of Service Tax by virtue of Sl. No. 12 (a) of Notification No.
25/2012-ST dated 20.06.2012.
Further, in respect of party's receipt of Rs. 51,81,151/-,
the liability of service tax (including Cesses) has been
calculated as Rs. 5,69,945/-, as below:
Period Gross amount
received (In
Rs.)
Net amount
(after cum
value benefit)
Rate of
service
tax
Service tax
(including
Cesses) payable
by the party (In
Rs.)
2014-15 51,81,151/- 46,11,206/- 12.36% 5,69,945/-
5.10 Now, I proceed to examine the taxability of amount
received by the party from the M/s Bharat Coking Coal
Limited, Dhanbad. I find that the party has received Rs.
1,47,43,773/-, during the period from 2014-15 to 2017-18
(upto June, 2017), in the following manner:
2014-15 2015-16 2016-17 2017-18
(Upto
June, 17)
TOTAL
88,36,494/- 26,71,305/- 32,35,974/- 0 1,47,43,773/-
BHARAT COKING
COAL LIMITED
DHANBAD
In respect of above, the party has submitted that they
have provided the work contract service amounting to Rs
88,36,494/- for repairing work of 827 residential quarters

Service Tax Appeal No.70570 of 2020
13
of Bharat Coking & Coal Limited during FY 2014-2015, as
detailed below:
Name of
Employer
Work order Ne Amount
Received/Gross
Turnover
88,36,494.00
Bharat Coking
Coal Limited
BCCL/CED/GM(C) WO-47 2013-
14/2021 DT 28.03.14
Similarly, work contract service amounting to Rs
26,71,305.00 for repairing work of 827 residential quarters
of Bharat Coking & Coal Limited during FY 2015-2016, as
detailed below:
Name of
Employer
Work order No Amount
Received/Gross
Turnover
Bharat Coking
Coal Limited
BCCL/CED/GM(C) WO-47 2013-
14/2021 DT 28.03.14
26,71,305.00
Similarly, work contract service amounting to Rs
13,01,888.00 for repairing work of 827 residential quarters
of Bharat Coking & Coal Limited during FY 2016-17, as
detailed below:
Name of
Employer
Work order
No
Amount Received/Gross Turnover
F.Y. 2016-17 F.Y. 2017-18 (Up
to June 2017)
Total
Bharat
Coking
Coal
Limited
Agreement
No 01 of
2014-15
13,01,888.00 - 13,01,888.00
The party further, submitted that the work is done based
on the agreement executed between them and Bharat
Coking Coal Limited following Work Order prior to
01.03.2015:
For the year 2014-15:
Work Order No Description of work
BCCL/CED/GM(C) WO-47
Thorough repairing of 827 Nos. residential
2013-14/2021 DT 28.03.14
quarters on deep seated land in WJ area,
Moonidih, BCCL (Half Part)
For the year 2015-16:
Work Order No Description of work
BCCL/CED/GM(C) WO-47 Thorough repairing of 827 Nos, residential
quarters on deep seated land in WJ area,

Service Tax Appeal No.70570 of 2020
14
2013-14/2021 DT 28.03.14 Moonidih, BCCL (Half Part)
For the year 2016-17:
Name of
Employer
Work order
No
Amount Received/Gross Turnover
F.Y. 2016-17 F.Y. 2017-18 (Up
to June 2017)
Total
Bharat
Coking
Coal
Limited
Agreement
No 01 of
2014-15
13,01,888.00 - 13,01,888.00
The party also submitted that service tax on above work
has already been paid by Bharat Coking and Coal Limited
under reverse charge mechanism. As tax is already paid,
they are not liable to pay service tax again on it. A copy of
certificate of Bharat Coking and Coal Limited regarding
payment of service tax under reverse charge was
attached.
5.10.1 As regards the taxability of the above amount I find
that the statutory provisions are as under:
The "Work Contract Service" prior to 01.06.2007, was
defined under section 65(105)(zzzza) as under:
"taxable service means any service provided or to be
provided to any person, by any other person in
relation to the execution of a work contract,
excluding work contract in respect of roads, airports,
railways, transport terminals, bridges, tunnels and
dams.
Explanation: For the purpose of this sub-clause 'work
contract' means a contract where-in
(i) transfer of property in goods involved in the
execution of such contract is leviable to tax as
sale of goods, and
(ii) such contract is for the purpose of carrying out-
(a) erection, commissioning or installation of
plant, machinery, equipment or structures,
whether prefabricated or otherwise,
installation of electrical or electronic devices,
plumbing, drain laying or other installation

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15
for transport of fluids, heating, ventilation or
air-conditioning, including related pipe work,
duct work and sheet metal work, thermal
insulation, sound insulation, fireproofing or
water proofing, lift and escalators, fire
escape staircases or elevators or
(b) construction of new building or civil structure
or a part there of, or of a pipeline or conduit,
primarily for the purpose of commerce or
industry, or
(c) construction of a new residential complex or
a part there of, or
(d) Construction of finishing services, repair
alteration, renovation or restoration of, or
similar service, in relation to (b) and (c), or
(e) Turnkey projects including engineering,
procurement and construction or
commissioning (EPC) projects."
Since, the period involved in the impugned show cause
notices is from Financial Year 2014-15 to 2016-17 and I
find that even after 30/06/2012 i.e. w.e.f. 01/07/2012 the
aforesaid work contract service remained taxable for being
not covered under negative list of services as provided
under section 66-D of Finance Act, 1994. But the same has
been listed under category of declared service under
subsection (b) and (h) of section 66E of Finance Act, 1994.
Section 65B(54) read as follows:
"works contract" means a contract wherein transfer
of property in goods involved in the execution of
such contract is leviable to tax as sale of goods and
such contract is for the purpose of carrying out
construction, erection, commissioning, installation,
completion, fitting out, repair, maintenance,
renovation, alteration of any movable or immovable
property or for carrying out any other similar activity
or a part thereof in relation to such property;

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The determination of value of service portion involved in
the execution of a works contract are contained in Rule 2A
of Service Tax (Determination of Value) Rules, 2006.
Rule 2A(ii) Where the value has not been determined
under clause (i), the assessee is liable to pay tax on the
service portion involved in the execution of the works
contract and shall determine the service tax payable in the
following manner, namely -
(A) in case of works contracts entered into for execution
of original works, service tax shall be payable on
forty per cent of the total amount charged for the
works contract;
(B) in case of works contract entered into for
maintenance or repair or reconditioning or
restoration or servicing of any goods, service tax
shall be payable on seventy percent of the total
amount charged for the works contract,
(C) in case of other works contracts, not covered under
sub-clause (A) and (B), including maintenance
repair, completion and finishing services such as
glaring, plastering, floor and wall filling, installation
of electric fitting of an immovable property, service
tax shall be payable on sixty percent of the total
amount charged for the works contract.
Further, as per Notification No. 30/2012-ST, dated 20-06-
2012, the service tax in respect of Work Contract services
provided -
by individual, HUF, Proprietary firm or partnership
firm including association of persons located in
taxable territory
to a business entity registered as a body corporate
located in taxable territory
is partially payable by recipient of service and partially by
service provider.

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Further, as per Entry No. 9 in Notification No. 30/service
tax to the extent of 50% is payable by the service recipient
and balance 50% by service provider.
5.10.2 Now, on examining the facts of the instant case in
light of above I find that the party has produced the copy
of an agreement bearing No. 1 of 2014-15 of M/s Bharat
Coking Coal Limited, O/o The General Manager (Civil), Civil
Engineering Department, Koyla Nagar, Dhanbad awarded
to the party for 'Through repairing of 827 Nos. residential
quarters on deep seated land in WJ Area, Moonidih, BCCL
(Half Part), for award value of Rs. 1,68,19483/-, bearing
LOA reference no. BCCL/CED/TC/LOA-46/2013-14/1947
DATED 15/18.03.2014, Work Order Reference No.
BCCL/CED/GM(C)/WO-47/2013-14/2021 dated
27/28.03.2014, commencing on 04.04.2014 and date of
completion as 03.04.2017.
Further, it is mentioned in the Letter of Acceptance that all
the materials, equipment, tools and plants required for the
work shall be arranged by the party.
Along with, the above agreement, the party also
enclosed a certificate dated 28.09.2019, certifying
therein the details of service tax payment made
under reverse charge for the period F.Y. 2013-14,
2014-15 and 2016-17.
On going through, the above work
order/agreement/letter of acceptance, it is evident
that the party has provided the work contract
service to M/s Bharat Coking Coal Limited and the
party being specified person i.e.
Proprietorship/partnership concern and the service
receiver too being specified person i.e. a Corporate
body, the party is liable to pay service tax on the
50% of the gross amount charged and on the rest
50% amount, service receiver i.e. M/s Bharat Coking
Coal Limited is liable to pay service tax, in terms of
Entry No. 9 in Notification No. 30/2012-ST, dated

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20-06-2012. Further, since the work is inclusive of
the material and for
maintenance/repair/reconditioning or restoration,
the party is entitled for abatement of 30%, thus they
have to pay tax on the 70% of the amount on which
they were liable to pay tax, as provided in clause (ii)
of rule 2A of Service Tax (Determination of Value)
Rules, 2006. Further, the contention of the party that
service tax on above work has already been paid by
Bharat Coking and Coal Limited under reverse
charge mechanism. As tax is already paid, they are
not liable to pay service tax again on it, is not
correct because from the perusal of the certificated
dated 28.09.2019, it is evident that the service
receiver i.e. M/s Bharat Coking Coal Limited has paid
service tax on 50% of the value and on remaining
50% the service tax is still unpaid. Accordingly, the
taxable value and service tax payable by the party is
re-calculated as below:
Period Gross amount
received by
the party (In
Rs.)
Amount on which
the party is liable
to pay Service Tax
(50% of the
previous column)
(In Rs.)
Taxable
Value after
abatement
of 30% (In
Rs.)
Rate
of
Servic
e Tax
(In %)
Service Tax
(including
Cesses)
payable (In
Rs.)
2014-15 88,36,494/- 44,18,247/- 30,92,772/- 12.36 3,82,267/-
2015-16 26,71,305/- 13,35,652/- 9,34,956- 14.5 1,35,569/-
2016-17 32.35.974/- 16,17,987/- 11,32,591/- 15 1,69,889/-
2017-18 (Upto
June, 17)
0 0 0 15 0
TOTAL 1,47,43,773/- 6,87,725/-
Thus, I find that in respect of receipt of Rs. 1,47,43,773/-
from M/s Bharat Coking Coal Ltd., the party are required
to pay Service Tax (including Cesses) of Rs. 6,87,725/-
alongwith interest.
5.11 Now, I proceed to discuss the taxability of the receipt
of the party from M/s Siddheevinayak Infravillage Private
Limited. I observe that in the impugned show cause notice
dated 23.04.2019, out of the total alleged amount of Rs.
15,18,85,891/-, it is seen that as per Form 26AS, the

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party has received Rs. 1,50,000/- from M/s
Siddheevinayak Infravillage Private Limited under Section
194C of the Income Tax Act, 1961.
Further, I observe that the party in this respect has not
submitted any defence nor submitted any
Contract/Agreement/Work Order/Bill.
As regards to taxability of the above amount of Rs.
1,50,000/- from M/s Siddheevinayak Infravillage Private
Limited, TDS has been deducted under Section194C of the
Income Tax Act, 1961. Provisions of section 194 C are as
under:-
"any person responsible for paying any sum to any
resident (hereinafter in this section referred to as the
contractor) for carrying out any work (including supply of
labour for carrying out any work) in pursuance of a contact
between the contractor and a specified person, shall at the
time of credit of such sum to the account of the contractor
or at the time of payment thereof in cash or by issue of a
cheque or draft or by any other mode, whichever is earlier,
deduct an amount equal to-... .".
Based on reading of above provisions of section 194C of
Income Tax Act' 1961, it is evident that tax is deducted
under section 194C for the payment related to carrying out
any work. Moreover, in respect of other receipts also the
same has been found to be in lieu of providing work
contract service. Hence, I come to conclusion that the
party has received the above amount of Rs. 1,50,000/- for
providing work contract service and has not discharged the
due service tax liability. Further, in absence of any
bill/work order/agreement/contract no abatement/reverse
charge could be granted. Accordingly, the service tax
(including Cesses) liability is calculated as Rs. 22,500/-, as
under:
Period Gross amount
received by the
party (In Rs.)
Amount on which
the party is liable
to pay Service
Tax
Rate of
Service
Tax (In
%)
Service Tax
(including
Cesses)
payable (In

Service Tax Appeal No.70570 of 2020
20
Rs.)
2014-15 0 0 0 0
2015-16 0 0 0 0
2016-17 1,50,000/- 1,50,000/- 15 22,500/-
2017-18
(Upto
June,
17)
0 0 0 0
TOTAL 1,50,000/- 1,50,000/- 0 22,500/-
Thus, I find that in respect of receipt of Rs. 1,50,000/-
from M/s Siddheevinayak Infravillage Private Limited, the
party are required to pay Service Tax (including Cesses) of
Rs. 22,500/-, alongwith interest.
5.12 Now, I take up the issue of proposal for imposition of
penalty under Section 76 of the Finance Act, 1994, in this
regard I find that it has been provided in Section 76 as
under:
(1) Where service tax has not been levied or paid, or has
been short-levied or short-paid, or erroneously refunded,
for any reason, other than the reason of fraud or collusion
or wilfulmis-statement or suppression of facts or
contravention of any of the provisions of this Chapter or of
the rules made thereunder with the intent to evade
payment of service tax, the person who has been served
notice under sub-section (1) of section 73 shall, in addition
to the service tax and interest specified in the notice, be
also liable to pay a penalty not exceeding ten per cent. of
the amount of such service tax:
Provided that where service tax and interest is paid within
a period of thirty days of-(i) the date of service of notice
under sub-section (1) of section 73, no penalty shall be
payable and proceedings in respect of such service tax and
interest shall be deemed to be concluded;
(ii) the date of receipt of the order of the Central Excise
Officer determining the amount of service tax under sub-
section (2) of section 73, the penalty payable shall be
twenty-five per cent. of the penalty imposed in that order,

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only if such reduced penalty is also paid within such
period.
I find that in the present case, the party has not paid the
due service tax, hence, I hold that the penalty under
Section 76, has rightly been invoked for imposition of
penalty.
I further find that though the party were providing taxable
service and were liable to pay Service Tax, they did not
take Service Tax registration in time. Thus, they are liable
to penalty under Section 77(1)(a) of the Act. I also find
that they had contravened miscellaneous statutory
provisions for which penalty under Section 77(2) of the
Act, is also imposable upon them.”
4.3 We find that the impugned order has confirmed the
demand in respect of the following receipts, detailed in para 5.9,
5.10 and 5.11 of the impugned order:
S No Period Reason for Confirmation Receipts ST
Demanded
1 2014-15 No documents produced in
respect of receipts from EE
Irrigation Department to
establish claim to exemption
5181151 569945
2 2014-
2016
Services Provided to Bharat
Coking Coal are exempt from
payment of service tax.
14743773 687725
3 2016-17 No documents produced in
respect of receipts from
Siddheevinayak to establish
claim to exemption
150000 22500
Total 20074924 1280170
4.4 Appellant do not dispute the facts in respect of receipts
from M/s Sidheevinayak Infravillage Private Limited, and fairly
conceded that they do not have any documents to establish that
these receipts were towards provision of exempted services.
Taking note of the above submission we uphold the demand
made on this account.
4.5 In respect of the demand made for the period 2014-15 in
respect of Receipt of Rs 51,18,151/- from Executive Engineer
Irrigation Department Varanasi, we observe that demand has

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been confirmed against the said receipts for the reason that
appellant at the time of adjudication did not able to produce
contract or agreements to establish the exempted nature of the
services provided. Appellant in his submissions made before us
in their appeal have stated that they had produced these
documents before the adjudicating authority at the time of
personal hearing, however adjudicating authority has not taken
cognizance of them while making the impugned order.
4.6 We reproduce the documents produced by the appellant
along with their appeal below:-

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4.7

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4.7 From the above documents it is evident that during the
Financial Year 2014-15 appellant had received the amounts as
detailed below from the Executive Engineer Irrigation Varanasi.
S
No
Receipt
Against
Agreement
Amount Date of
Receipt
Purpose
1 25/EE/13-14 1710864 19.05.2014 Construction of

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Interlocking CC Block
2 25/EE/13-14 911245 09.07.2014
Road from Dildarnagar
Railway Station to by
pass Road.
3 47/EE/14-15 2559042 31.03.2015 Protection of Narva Ghat
of Right Bank of River
Ganga in jamania, Village
Gahmar, Ghazipur
Total 5181151
Thus it is evident that the receipts of the appellant from
Executive Engineer Irrigation Varanasi during the Financial Year
2014-15 were in respect of construction of road and Narva Ghat
of Right Bank of River Ganga. These services being provided to
Government/ Government Authority are exempt from payment
of Service Tax as per S No 12 (a) of the Notification No
25/2012-ST dated 20.06.2012. Impugned order has in respect of
similar/ same services provided by the appellant to Executive
Engineer Irrigation Varanasi, for the subsequent period has
allowed the exemption. Thus we do not find any merits in this
demand.
4.8 In respect of the receipts from the M/s Bharat Coking Coal
Limited we observe that the said service recipient cannot be said
to be an Government Authority as defined by Notification No
25/2012-ST dated 20.06.2012. Appellant has not been able to
show that the said company was constituted by any Central or
Sate Legislation (Act) nor the government held any share
holding as prescribed by the the definition clause. We also refer
to Form No MGT-7 in respect of Bharat Coking Coal Ltd.,
reproduced below which clearly establishes the nature of the said
company.

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From the perusal of the above it is evident that M/s Bharat
Coking Coal Company which is an subsidiary of Coal India
Limited do not qualify as Government Authority. Thus the
exemption claimed by the appellant in respect of the services of
repair of houses for the said service recipient would not qualify
for exemption as claimed by the appellant. We also observe that
appellant had before the adjudicating authority produced a
certificate from the said service recipient, in respect of payment
of service tax in respect of these services on reverse charge
basis. As per Notification No 30/2012-ST in respect of he work
contract services service tax to be pid by the service recipient on
reverse charge basis is 50% and 50% of the Service Tax is to be
paid by the service provider. Impugned order clearly and

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emphatically records that the service recipient has paid 50% of
the Service tax due from him in respect of the services received
from the appellant and remaining 50% is to be borne by the
service provider. When the service recipient did not find that the
services received by him were exempt from payment of service
tax, for the reason that it is was having the character of
Government Authority, we do not find any merits in the
submissions made by the appellant in this regard.
4.9 In respect of the penalties imposed under Section 76 and
77 of the Finance Act, 1994 we observe that these penalties are
for the contraventions made in law and are civil in nature and
follow naturally the contraventions made. Apepllant though was
providing the taxable service had failed to take registration and
file the due returns, resulting in nonpayment/ short payment of
service tax by or the due date. The penalties imposed under
section 76 and 77 cannot be faulted with. However as we have
reduced the amount of demand the penalty imposed under
Section 76 is accordingly modified to Rs 71,022/- (Rs 68772/-+
Rs. 2250/-). We also take note of the decision of the Hon’ble
Supreme Court in case of Gujarat Trvancore Agency [1989 (42)
ELT 350 (SC)] wherein following has been observed:
“4. Learned Counsel for the assessee has addressed
an exhaustive argument before us on the question
whether a penalty imposed under Section 271(1)(a) of
the Act involves the element of mens rea and in support
of his submission that it does he has placed before us
several cases decided by this Court and the High Courts
in order to demonstrate that the proceedings by way of
penalty under Section 271(1)(a) of the Act are quasi
criminal in nature and that, therefore, the element of
mens rea is a mandatory requirement before a penalty
can be imposed under Section 271(1)(a). We are
relieved of the necessity of referring to all those
decisions. Indeed, many of them were considered by
the High Court and are referred to in the judgment
under appeal. It is sufficient for us to refer to Section
271(1)(a), which provides that a penalty may be

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imposed if the Income Tax Officer is satisfied that any
person has without reasonable cause failed to furnish
the return of total income, and to Section 276C which
provides that if a person wilfully fails to furnish in due
time the return of income required under Section
139(1), he shall be punishable with rigorous
imprisonment for a term which may extend to one year
or with fine. It is clear that in the former case what it
intended is a civil obligation while in the latter what is
imposed is a criminal sentence. There can be no dispute
that having regard to the provisions of Section 276C,
which speaks of wilful failure on the part of the
defaulter and taking into consideration the nature of the
penalty, which is punitive, no sentence can be imposed
under that provision unless the element of mens rea is
established. In most cases of criminal liability, the
intention of the Legislature is that the penalty should
serve as a deterrent. The creation of an offence by
Statute proceeds on the assumption that society suffers
injury by and the act or omission of the defaulter and
that a deterrent must be imposed to discourage the
repetition of the offence. In the case of a proceeding
under Section 271(1)(a), however, it seems that the
intention of the legislature is to emphasise the fact of
loss of Revenue and to provide a remedy for such loss,
although no doubt an element of coercion is present in
the penalty. In this connection the terms in which the
penalty falls to be measured is significant. Unless there
is something in the language of the statute indicating
the need to establish the element of mens rea it is
generally sufficient to prove that a default in complying
with the statute has occurred. In our opinion, there is
nothing in Section 271(1)(a) which requires that mens
rea must be proved before penalty can be levied under
that provision. We are supported by the statement in
Corpus Juris Secundum Volume 85, page 580,
Paragraph 1023 :

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“A penalty imposed for a tax delinquency is a civil
obligation, remedial and coercive in its nature, and is
far different from the penalty for a crime or a fine or
forfeiture provided as punishment for the violation of
criminal or penal laws.”
5. Accordingly, we hold that the element of mens rea
was not required to be proved in the proceedings taken
by the Income Tax Officer under Section 271(1)(a) of
the Income-tax Act against the assessee for the
assessment years 1965-66 and 1966-67.”
In the case of Usha Martin Construction Steel Ltd. [2014 (306)
E.L.T. 270 (All.)] Hon’ble Allahabad High Court observed as
follows:
“13. In Gujarat Travancore Agency v. Commissioner of
Income Tax, 1989 (42) E.L.T. 350 (S.C.) the Supreme
Court held that in the absence of any indication in the
language of statute of the need to establish mens rea, the
default in completing with the statute is sufficient for levy
of penalty, which is a civil obligation and coercive remedy
for loss of revenue. No doubt an element of coercion is
present in the penalty, the terms in which penalty falls to
be measured under Section 271(1)(a) of the Income-tax
Act is significant.”
4.10 As the appellant have failed to deposit the service tax
payable by the due date the demand of interest under Section
75 will flow as natural corollary to the demand and cannot be
faulted with. We uphold the demand of interest.
4.11 Summarizing our findings:
a. Demand of Service tax made by the impugned order and
the corrigendum issued is reduced to Rs 7,10,225/-
b. Penalty imposed under Section 76 is reduced to Rs
71,022/-
c. Penalties imposed under Section 77 (1) (a) and 77 (2)
are upheld.

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d. Demand of interest in respect of the demand of service
tax upheld as per ‘a’ in terms of Section 75 of the
Finance Act, 1994 is upheld.
5.1 The Miscellaneous Application filed by the appellant is
allowed.
5.2 The appeal filed is partly allowed as indicated in para 4.11
above.
(Order pronounced in open court on-01 September, 2026)

(P.A. AUGUSTIAN)
MEMBER (JUDICIAL)



(SANJIV SRIVASTAVA)
MEMBER (TECHNICAL)


akp