CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH, COURT NO. 3 SERVICE TAX APPEAL NO. 52764 OF 2019 [Arising out of Order-in-Original No.06/COMMR/ST/IND/2019 dated 15.05.2019 passed by the Commissioner, CGST & Central Excise, Indore]

M/s. Balaji Traders Appellant

23, Prabhushree Nagar, Dewas, M.P.

Vs.

Commissioner, CGST & Central Excise, Respondent Indore P.B. No.-10, Manik Bagh Palace, Indore (Madhya Pradesh)- 452001 Appearance:

Present for the Appellant : Shri Krishan Garg, Advocate Present for the Respondent: Shri V.K.Jain, Authorised Representative CORAM:

HON'BLE MS. BINU TAMTA, MEMBER (JUDICIAL)

HON'BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL)

Date of Hearing : 10.11.2025 Date of Decision: 16.01.2026 Final Order No.50073/2026 HEMAMBIKA R. PRIYA The present appeal has been filed by M/s. Balaji Traders¹ against the Order-in-Original No. 06/COMMR/ST/IND/2019 dated 15.05.2019 passed by the Commissioner, CGST & Central Excise, Indore wherein

1. the Appellant the demand of service tax amounting to Rs.2,68,19,780/- was confirmed along with interest and penalties.

2. The brief facts are that the appellant is engaged in work for road construction, specifically the Granular Subbase (GSB) portion. The services provided during the period October 2012 to March 2017 include:

1. Mining, quarrying, and blasting of boulders using explosives and pocklane excavators at quarry sites for road construction. Drilling and blasting is the controlled use of explosives to break rocks, typically practiced in mining, quarrying, and road construction.

2. Loading and transporting the excavated materials (boulders/rock and earth) to the construction sites via dumpers.

2.1 The Appellant failed to obtain service tax registration and file periodical returns. An inquiry was initiated by Directorate General of GST Intelligence (DGGSTI), Bhopal Zonal Unit on October 19, 2016. The investigation alleged suppression and failure by the appellant to discharge service tax liability. Show Cause Notice dated July 31, 2018, was issued demanding Rs.2,68,19,780/-. The Adjudicating Authority adjudicated the demand relying on Section 174(2)(e) of the CGST Act, 2017, the transitional provision to uphold the said proceedings, including inquiry and adjudication, following the repeal of the Finance Act, 1994. The demand was confirmed along with interest and penalty.

3. Learned Counsel submitted that Drilling and blasting services are covered under works contract services and since the same is provided for construction of road, which is an exempt service, hence their services were exempt under Notification No. 25/2012-ST dated 20-06- 2012. The learned counsel relied on the Tribunal decision in the case of The Commissioner Central Excise & Central GST, Udaipur vs.

M/s. Navdeep Traders², wherein similar issue had been decided.

4. Learned Authorized Representative reiterated the findings that the Appellant's activities are preparatory services involving the consumption or transformation of material (like explosives and quarried rock) and did not satisfy the legal requirement of 'works contract' as they lack the essential transfer of property in goods, as correctly concluded by the Adjudicating Authority based on judicial precedents. Since the Appellant failed to register, file returns, and suppressed the extent of their taxable activities, the demand confirmed under the extended period of limitation and the imposition of penalties for suppression of facts are legally justified. However, he accepted that the issue was covered by this Tribunal’s decision as relied on by the learned counsel.

5. We have heard the learned counsel for the appellant and the learned authorized representative for the Department and perused the records.

2. Final Order No.50575/2023 dated 28.04.2023

6. We note that the said issue is no more res-integra and stands covered by this Tribunal’s decision in M/s. Navdeep Traders (supra).

The relevant paragraphs are reproduced hereinafter:

“13. We observe th