Construction of educational hostel buildings not taxable as commercial and industrial construction service, with demand unsustained.

Construction of hostel buildings for educational institutions was held not to fall within Commercial and Industrial Construction Service. The Tribunal treated the classification of the activity as the central issue and found that the department had not cited any contrary binding decision. It also held that reliance on a prima facie stay order was insufficient to sustain the service tax demand. On that basis, the disputed construction activity was held outside the taxable service category.

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Issues: Whether construction of hostel buildings for educational institutions is taxable as Works Contract Service or Commercial and Industrial Construction Service.

Analysis: The dispute turned on the proper classification of the construction activity undertaken for educational institutions. The Tribunal accepted that construction of hostel buildings for such institutions does not fall within Commercial and Industrial Construction Service, and the department did not point out any contrary binding decision. The reliance placed by the adjudicating authority on a prima facie stay order was found insufficient to sustain the demand.

Conclusion: The activity was not taxable under the disputed service category, and the appeal succeeded.

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