Intended use governs construction taxability where a training centre and allied facilities are built for non-commercial industrial purposes.

Construction of a building for a training centre and allied common facilities was held not taxable as commercial or industrial construction service because the intended use, as shown in the approved plan and work order, was training, testing and related infrastructure for industrial units, not trade or commercial use. The Board circular was applied to treat the intended use in the approved plan as decisive, and constructions for educational or similar non-profit purposes were treated as outside the tax net. The objection that the appellate authority had gone beyond the show cause notice was rejected, and the assessee succeeded.

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Issues: Whether the construction of a building for use as a training centre and related common facilities for an industrial infrastructure body was liable to service tax as commercial or industrial construction service.

Analysis: The construction taxability depended on whether the building was used or to be used primarily for commerce or industry. The approved plan described the building as a training centre, and the work order also indicated space for training and related infrastructure. The building was found to be a Government project created for training, testing and allied facilities for industrial units, and not a structure meant for trade or commercial use. The Board's circular was applied to hold that the intended use shown in the approved plan was decisive, and constructions for educational or similar non-profit purposes were not taxable as commercial constructions. The contention that the appellate authority had travelled beyond the show cause notice was rejected.

Conclusion: The construction was not taxable as commercial or industrial construction service, and the finding was in favour of the assessee.

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