2022 (8) TMI 1102 - AT - Service Tax

Tribunal rules in favor of appellant, exempts APMC construction from service tax.

The Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal. It concluded that the construction of a Market ... Commercial and Industrial Construction service - Leviability of service tax depends on whether construction is used or to be used for commerce or industry - APMC activities providing market infrastructure for public/charitable purposes not taxable as commercial construction - Distinction between Business Support Service and Business Auxiliary Service in relation to statutory market feeCommercial and Industrial Construction service - APMC activities providing market infrastructure for public/charitable purposes not taxable as commercial construction - Leviability of service tax depends on whether construction is used or to be used for commerce or industry - Construction of Market Yard for APMC is not liable to service tax under Commercial and Industrial Construction service. - HELD THAT: - The Tribunal accepted that the works were for construction of a market yard for an Agricultural Produce Market Committee (APMC). Prior decisions of the Tribunal were followed, which hold that APMCs are statutory bodies constituted for public/charitable purposes and that activities undertaken from market fees to provide and maintain market infrastructure benefit all users rather than constituting outsourced business support service to licensees. The levity of service tax on construction depends on whether the building or civil structure is used, or to be used, for commerce or industry; constructions for institutions established solely for charitable or public purposes are non commercial and not taxable. Applying these principles, the Tribunal concluded that construction of the market yard is not commercial in nature and therefore falls outside the Commercial and Industrial Construction service taxable ambit.Impugned order set aside and appeal allowed; construction of the market yard for APMC held not taxable under Commercial and Industrial Construction service.Final Conclusion: The Tribunal allowed the appeal and held that construction of the APMC market yard is not covered by the Commercial and Industrial Construction service and therefore is not liable to service tax. Issues involved: Whether the construction of Market Yard for agriculture produce for APMC is liable to service tax under Commercial and Industrial Construction service.Analysis:1. Issue of Tax Liability: The primary issue in this case revolves around determining the tax liability concerning the construction of a Market Yard for agriculture produce for APMC under the Commercial and Industrial Construction service. The appellant, represented by Shri Amal Dave, argued that a similar issue had been previously decided by the Tribunal in the case of AB Projects Pvt Ltd. The appellant also cited relevant judgments to support their position.2. Judicial Precedents: The appellant relied on various judicial precedents, including the case of Sanjeev K. Gaddamwar Vs. Commissioner of Central Excise, Nagpur, and Ganpati Mega Builders (India) Pvt Ltd Vs. Commissioner of Customs, C.Ex.& ST., Agra, among others. These precedents were presented to strengthen the argument regarding the non-applicability of service tax on the construction of Market Yard for APMC.3. Revenue's Position: On the other hand, the Revenue, represented by Shri J.A Patel, reiterated the findings of the impugned order, emphasizing the tax liability aspect related to the construction activity in question.4. Tribunal's Analysis: After considering the submissions from both parties and examining the records, the Tribunal analyzed the issue. Referring to the case of AB Projects, the Tribunal concluded that the construction of a Market Yard for APMC does not fall under the purview of Commercial and Industrial Construction service. The Tribunal highlighted the charitable nature of APMC, as supported by circulars, to establish that the services provided by APMC are classifiable as Business Auxiliary Service (BAS) and hence exempt from service tax.5. Interpretation of Legal Provisions: The Tribunal further delved into the interpretation of relevant circulars, such as Circular No. 157/8/2012-S.T. and Circular No. 80/10/2004-S.T., to clarify that the activities of APMC do not have a commercial nature, thus not warranting service tax liability under commercial and industrial construction services.6. Conclusion: Based on the above analysis and the precedent set by the Tribunal in previous cases, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal. The decision emphasized that the construction activities related to APMC, including the Market Yard, do not attract service tax under the Commercial and Industrial Construction service.7. Final Verdict: The judgment provided a comprehensive analysis of the tax liability issue concerning the construction of Market Yard for APMC, drawing on legal interpretations, precedents, and circulars to support the decision in favor of the appellant and clarifying the non-applicability of service tax in this context.