Subcontracted construction services for an educational establishment can still qualify for exemption and refund under the Finance Act.

Section 102 of the Finance Act, 1994 exempted taxable services provided to the Government, a local authority, or a Governmental authority in relation to specified construction activities, including structures meant for educational establishments. A subcontractor's services for an IIT Kharagpur Research Park project were treated as part of the underlying educational-establishment construction, and the exemption was held to depend on the nature of the service and its recipient, not on whether billing passed through the main contractor. The refund claim was also filed within the statutory period, so the denial of refund was unsustainable.

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Issues: Whether a subcontractor rendering services through the main contractor in connection with construction of an educational establishment was entitled to exemption and refund under Section 102 of the Finance Act, 1994.

Analysis: Section 102 exempted taxable services provided to the Government, a local authority or a Governmental authority in relation to specified construction activities, including structures meant for educational establishments. The work at issue related to IIT, Kharagpur Research Park, an educational establishment, and the appellant's services formed part of that project even though billing was raised through the main contractor. The exemption depended on the nature and recipient of the underlying service, not on whether the work was routed directly by the main contractor or through a subcontractor. The refund claim was also filed within the statutory period. The reasoning was supported by the principle that a subcontracted service does not change its character merely because of the billing channel.

Conclusion: The appellant was entitled to the exemption and refund under Section 102 of the Finance Act, 1994, and the denial of refund was unsustainable.

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