Commercial construction classification governs telecommunication tower civil works, making 67% abatement available under the service tax notification.

Construction of a telecommunication tower civil structure under a composite contract was treated as commercial or industrial construction service because the dominant work was site clearance, excavation, foundation and erection of the civil structure, with excavation and site formation being only incidental and ancillary. On that classification, the benefit of 67% abatement under Notification No. 1/2006-ST was available, since the contract fell within the construction service category rather than site formation service.

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Issues: Whether the construction of a telecommunication tower civil structure under a composite contract was classifiable as commercial or industrial construction service and, if so, whether the assessee was entitled to 67% abatement under Notification No. 1/2006-ST.

Analysis: The contract was for construction of a civil structure on which the telecommunication tower was to be erected, and the work comprised site clearance, excavation, foundation work and construction of the civil structure. The portion relatable to excavation and site formation was only incidental and ancillary to the dominant civil construction activity, while the major consideration was for civil structure work. On that basis, the service was held to fall under commercial or industrial construction service rather than site formation service. As the classification was accepted under the construction service category, the abatement contemplated by Notification No. 1/2006-ST was available.

Conclusion: The service was correctly classifiable as commercial or industrial construction service, and the 67% abatement was admissible to the assessee.

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