Tribunal Rules Construction of Govt. Buildings Not Commercial; Demand for 2009-11 Unsustainable Due to Limitation.

The Tribunal set aside the impugned order and allowed the appeal, ruling that the demand under construction service for the years 2009-2010 and 2010-2011 was unsustainable. It was determined that the construction of government buildings, such as the Income Tax building and Staff Quarters for the Central Administrative Tribunal, did not fall under Commercial or Industrial Construction Service. Additionally, the Tribunal found no malafide intention or suppression of facts by the appellant, a sub-contractor, thus deeming the demand unsustainable on the ground of limitation. Judgment was pronounced on 02.01.2024.

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Issues involved:
The issues involved in the judgment are the demand under construction service for the years 2009-2010 and 2010-2011, classification of the construction service as Commercial or Industrial, construction of government buildings, liability of sub-contractor for service tax, and the sustainability of the demand on the ground of limitation.

Classification of construction service:
The appellant argued that the construction of Income Tax building and Staff Quarters for Central Administrative Tribunal, being government buildings, does not fall under Commercial or Industrial Construction Service. The Tribunal agreed, stating that the service provided did not fall under the mentioned category. The judgments cited by the appellant supported their case, leading to the conclusion that the demand was not sustainable based on the nature of the construction service provided.

Liability of sub-contractor for service tax:
The appellant provided the service as a sub-contractor, and the Tribunal referred to previous case laws to determine the liability of sub-contractors for service tax. It was noted that the issue had been under litigation and was finally decided by a larger bench judgment. In light of this judgment, the Tribunal concluded that there was no malafide intention or suppression of fact by the appellant to evade service tax. Consequently, the demand was deemed unsustainable on the ground of limitation as well.

Decision:
After considering the submissions from both sides and examining the records, the Tribunal set aside the impugned order. The appeal was allowed, and the demand under construction service for the specified years was deemed unsustainable. The judgment was pronounced in open court on 02.01.2024.

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