The CESTAT held that the rehabilitation of breakwaters...

The CESTAT held that the rehabilitation of breakwaters constitutes a works contract service eligible for exemption under the relevant notification, as the activity pertains to a civil structure not intended for commerce, industry, or any other business or profession. The adjudicating authority erred by misinterpreting the scope of the exemption and unduly emphasizing the phrase 'by way of' without legal justification. The Tribunal found that the exemption notification's limitation to civil structures for non-commercial use was overlooked, and the service tax demand proceedings against the appellant were rightly dropped by the Commissioner. Consequently, the impugned order denying exemption was set aside, and the appeal was allowed, affirming the appellant's entitlement to exemption on the service rendered to governmental authorities.