CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL NEW DELHI PRINCIPAL BENCH-COURT NO. 4 SERVICE TAX APPEAL NO. 52956 OF 2019 [Arising out of Order-in-Appeal No. 321(CRM)/ST/JPR/2019 dated 13.09.2019 passed by the Commissioner (Appeals) Central Excise & CGST, Jaipur]

RAJASTHAN STATE AGRICULTURE .......APPELLANT MARKETING BOARD Pant Krishi Bhawan, C-Scheme, Jaipur Vs.

COMMISSIONER CGST & CENTRAL EXCISE –JAIPUR ......RESPONDENT RAJASTHAN Appearance:

Present for the Appellant : Shri Rahul Lakhwani, Advocate Present for the Respondent: Shri Shashank Yadav, Authorised Representative CORAM:

HON'BLE DR. RACHNA GUPTA, MEMBER ( JUDICIAL )

HON'BLE MR. P. V. SUBBA RAO, MEMBER ( TECHNICAL )

FINAL ORDER NO. 50814 /2025 Date of Hearing : 10/03/2025 Date of Decision :02/06/2025 P. V. SUBBA RAO The Rajasthan state agriculture marketing board¹ filed this appeal to assail the Order-in-Appeal dated 13.09.2019² passed by the Commissioner (Appeals) upholding the order dated 03.07.2018 passed by the Assistant Commissioner, confirming

1 Appellant

2 Impugned order demand of ₹14,23,657 under section 73 (2) of the Finance Act, 1994³ along with interest under section 75 of the Finance Act and imposed penalties under section 77 and 78 of the Finance Act on the Appellant.

2. The appellant is a board created under section 22-A of the Rajasthan Agricultural Produce Markets Act, 1961. The appellant had issued following three work orders to M/s. Laxmi Narayan Agarwal⁴, the service provider.

a) Work Order No. P-33 (Works) I/13-14/1745-55 dated

1.10.2013 for construction of two auction platforms covered with CGI sheet at Mahdi Phalodi b) Work Order No. 1102 dated 7.11.2016 for construction of self supporting roofing work over internal roads of Block B at Terminal Market, Muhana- Package 04/2016-17 c) Work Order no. 1118 dated 7.11.2016 for construction of self supporting roofing work over internal roads of Block B at Terminal Market Muhana- Package -03/2016-17

3. Neither the service provider nor the appellant paid any service tax on these services. The Service provider was however, registered with the Service tax department. Receiving intelligence that the service provider had rendered taxable services and had not paid service tax on them, the officers initiated an investigation, issued several summons to the service provider and obtained details of the services provided by him.

3 Finance Act

4 Service Provider

4. The submission of the service provider during investigation was that the services provided to the appellant were exempted by Notification No. 25/2012-ST dated 20.6.2012 clause 12(a) and therefore, no service tax was required to be paid. The relevant portion of the notification reads as follows:

“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 structure or any other original works meant predominantly for use other than for commerce, industry or any other business or profession;”

5. It was further found during investigation that in respect of some notified services, service tax had to be paid by the service recipient to the extent indicated in the notification. As per Notification no. 30/2012-ST dated 20.6.2012 (entry no. 9), “in respect of service provided or agreed to be provided in service portion in execution of works contract” the service provider and the service recipient had to pay 50% each of the service tax. Since the appellant was the service recipient but had not paid 50% of the service tax on the aforesaid works contracts, a Show Cause Notice dated 2.2.2018⁵ was issued to the appellant which culminated in the order of the Assistant Commissioner which has been upheld in the impugned order by the Commissioner (Appeals).

Submissions of the appellant

6. Learned counsel for the appellant made the following submissions:

5 SCN (i) The Assistant Commissioner is appointed under CGST Act