Airport infrastructure exemption applies to passenger car parks treated as integral parts of the aerodrome, not separate works contracts.

A multi-level car park constructed within airport premises was treated as part of the airport, because the statutory definitions of "airport" and "aerodrome" include buildings and other structures appertaining to landing, departure, and passenger facilities. As the car park was adjacent to the main terminal and functioned as an amenity for passengers, it was regarded as an integral component of the airport rather than a separate works contract service. On that basis, the facility qualified for service tax exemption, and the associated tax demand, penalty, and interest were not sustainable.

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Issues: Whether the Multi-Level Car Parking constructed at the airport formed part of the airport or aerodrome and was therefore exempt from service tax, or was a separate works contract service liable to tax.

Analysis: The construction was held to be part of the airport because the statutory definition of airport under the Airports Authority of India Act, 1994, read with the definition of aerodrome under the Aircraft Act, 1934, includes buildings and other structures appertaining to the landing and departure area. The Multi-Level Car Parking was adjacent to the main terminal building and functioned as an amenity primarily for passengers, and was therefore treated as an integral component of the airport. The reasoning was reinforced by the earlier Tribunal view that a facility constructed in the vicinity of the airport may fall within the airport for exemption purposes.

Conclusion: The Multi-Level Car Parking was held to be part of the airport and eligible for exemption from service tax, so the demand, penalty, and interest could not survive.

Ratio Decidendi: A structure constructed within the airport premises and appertaining to passenger and operational facilities forms part of the airport or aerodrome for purposes of exemption, and is not separately taxable as works contract service.

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