2018 (2) TMI 321

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....engaged in rendering Works Contract Service (Civil) for M/s. SRM Institute of Science and Technology [hereinafter referred to as "M/s. SRMIST"] and M/s. Valliammal Society [hereinafter referred to as "M/s. VS"] and other entities of the group. (ii) External Division, which is engaged in rending Civil Works for the buildings and factories for other than the group clients. The present appeal relates to Works Contract Services rendered by the Internal Division of the appellant-Company. 2. A show-cause notice was issued for the period Oct. '08 to Jun.'12, alleging short-payment of service tax on Works Contract Services, which after adjudication, culminated in confirmation of service tax along with interest and also imposition of penalties. H....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... case of M/s. VS, the revenue collected from educational activities for the combined four years would be Rs. 475.4 crores, whereas, the value of other taxable services would only be Rs. 1.53 crores. This data would clearly show that the primary activity of the customers of the appellants, namely, M/s. SRMIST and M/s. VS is that of rendering educational services. The department has proceeded to confirm the liability by erroneously holding that the appellants having rented out part of the building as well as being engaged in scientific and technical services, are engaged in services which are of profit motive. He argues that these activities only are incidental or secondary activities of the customers of the appellants. He also contended that....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....pugned order. He laid thrust upon the Circular dated 17.02.2004, wherein the Board has issued a clarification with regard to that is commercial or industrial construction. He submits that only when such constructions are for the use of organizations or institutions being established solely for education, religious, charitable, health, sanitation or philanthropic purposes and not for the purpose of profit, such building would be non-commercial in nature. The buildings constructed by the appellants are not solely used for education purposes. Customers of the appellants are renting out parts of the building and also conducting Scientific and Technical Consultancy Services, Man-power Supply Services and Training Activities in these buildings an....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....part thereof, or of a pipeline or a conduit, primarily for the purpose of commerce or industry, would fall within the definition of Works Contract Service. (c) to (e) ...... ...... ....... ....... 7. 1 The appellants have produced materials before us to contend that the customers, namely, M/s. SRMIST as well as M/s. VS are engaged primarily in rendering of educational services and, therefore, the building constructed for these clients would not fall within the definition of Works Contract Services. On examining the financial statements of these customers, M/s. SRMIST as well as M/s. VS, we find that the argument put forward by the learned consultant is not without substance. The revenue earned by this institution/society by avai....