Tribunal allows appeals, sets aside orders on grounds including service tax exemption for military constructions.

The Tribunal allowed the appeals filed by the appellant, setting aside the impugned orders on various grounds. The Tribunal held that construction activities for married military troops not requiring approval were not liable to service tax. It suggested re-verification of documents for Cenvat credit availed and closed the demand for "preferential location charges" as the tax amount had been paid. The liability on business exhibition services availed outside India was deemed unsustainable, with no penalty imposed due to lack of malafide intent.

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Issues:
1. Liability to service tax on construction of complex service under Section 65 (105) (zzzh) of the Finance Act, 1994.
2. Dispute regarding Cenvat credit availed by the appellant.
3. Demand of service tax on "preferential location charges" under Section 65 (105) (zzzzu).
4. Service tax demanded under the category of "advertisement - sale of space or time" and "business exhibition service."

Issue 1: Liability to service tax on construction of complex service
The appellant contested the tax liability on the grounds that approval from an authority under any law was not required for construction projects meant for defence personnel. The Tribunal considered correspondence between the contractors, DG (MAP) of the Defence Ministry, and the CBEC, which clarified that no service tax would be levied if no approval was required for construction projects for defence personnel. The Tribunal relied on precedents and held that construction activities for married military troops, not requiring approval, were not liable to service tax.

Issue 2: Dispute regarding Cenvat credit availed
The lower Authority disallowed Cenvat credit availed by the appellant on the basis of incomplete documents and discrepancies in amounts. The Tribunal noted that the appellants submitted all invoices during adjudication and explained objections raised against allowing credit. The Tribunal found merit in the appellant's submissions and suggested re-verification of documents by the Original Authority to determine the correctness of credit availed.

Issue 3: Demand of service tax on "preferential location charges"
The appellant had already paid the entire demand along with interest before the issue of show cause notice. The Tribunal agreed that the matter should have been closed without issuing a demand under Section 73 (3) as the service tax amount had been discharged. The Tribunal found that the appellant had a bona fide belief regarding the service being part of overall construction service, warranting closure under Section 73 (3).

Issue 4: Service tax demanded under "advertisement - sale of space or time" and "business exhibition service"
The Tribunal held that the liability on business exhibition services availed outside India and paid in foreign exchange was not sustainable. The Tribunal referred to a precedent and set aside the service tax liability confirmed for this service. The Tribunal also considered the reconciliation of taxable value in ST-3 returns and P&L account, finding no malafide intent and thus no penalty was imposed on this account.

In conclusion, the Tribunal allowed the appeals filed by the appellant by setting aside the impugned orders on various grounds discussed and analyzed thoroughly.

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