Airport-linked cargo building treated as part of aerodrome, excluding its construction from works contract service.

An air cargo agent building constructed as an annex to an air cargo terminal was treated as physically and functionally integral to the airport operation. Because it formed part of the cargo processing and clearance chain for export and import traffic, the building was held to appertain to the airport or aerodrome under the relevant definition. On that basis, the construction was excluded from works contract service, and the demand, penalty, and impugned order were set aside.

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Issues: Whether the air cargo agent building constructed as an annexee to the air cargo terminal formed part of the airport or aerodrome and therefore fell within the exclusion from works contract service.

Analysis: The building was found to be physically and functionally connected with the air cargo terminal and necessary for its smooth operation. The cargo process was held to be interlinked, with the building serving as part of the processing and clearance chain for export and import cargo. In that setting, the definition of airport and aerodrome was applied to include buildings appertaining to the airport, and the construction was not treated as a separate taxable works contract activity.

Conclusion: The air cargo agent building forms part of the airport/aerodrome, and the construction activity is excluded from works contract service. The demand, penalty, and impugned order were set aside, and the appeal succeeded.

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