Non-commercial construction service classification excludes educational and residential projects, supporting waiver of pre-deposit in tax dispute.

Construction of buildings for educational societies operating on a no-profit basis was treated as non-commercial in nature under the applicable Board circular, so it did not fall within taxable commercial or industrial construction service. The recipient societies' objects showed educational purpose and absence of profit motive, supporting the exemption from that category. Construction of individual residential houses was also found to lie outside the scope of construction of a residential complex. On that basis, the appellant was held to have a prima facie case, and pre-deposit of the demanded service tax and penalties was dispensed with.

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Issues: Whether the appellant had made out a prima facie case for dispensing with pre-deposit of the service tax and penalties demanded on construction activity undertaken for educational societies and for individual residential houses.

Analysis: The demand was founded on the premise that the appellant had provided commercial or industrial construction service. The Board's circular was applied to the effect that buildings or civil structures used, or to be used, for educational, religious, charitable, health, sanitation or philanthropic purposes and not for profit are non-commercial in nature and not taxable under that category. The memorandum of association of the recipient societies indicated that they were established for educational purposes and were working on a no-profit basis. The construction of individual residential houses was also found to be outside the scope of construction of a residential complex.

Conclusion: The appellant was held to have a good prima facie case, and the condition of pre-deposit of service tax and penalties was dispensed with.

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