Public infrastructure construction outside Commercial or Industrial Construction Service tax net; unconditional stay of recovery granted.

Unconditional stay of recovery was granted where service tax, interest and penalties were demanded on construction of public water supply projects treated as Commercial or Industrial Construction Service. The Tribunal accepted that the work related to civic amenity infrastructure undertaken for a State board in the public interest, and followed earlier decisions holding that such public infrastructure does not fall within the taxable category relied on for the demand. On that basis, recovery was stayed without conditions.

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Issues: Whether the appellant was entitled to unconditional stay of recovery of service tax, interest and penalties demanded on construction of water supply projects treated as taxable under Commercial or Industrial Construction Service.

Analysis: The demand was contested on the basis that the work related to public water supply infrastructure undertaken for a State board. The Tribunal followed earlier decisions holding that such infrastructure and civic amenity projects undertaken in public interest do not fall within the taxable category relied upon for the demand, and noted that similar matters had been granted stay relief.

Outcome: Unconditional stay granted.

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