TaxTMI 
TaxTMI 
2023 (6) TMI 1000
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....Pvt. Ltd., Valsad for construction of the Medical College Building at Bhuj. During the Scrutiny of the refund claim revenue observed the discrepancies. The said observations culminated into issuance of show cause notice dated 18.04.2011 and 25.01.2012 wherein it was proposed to reject the refund claims under Section 11B of the Central Excise Act, 1944. The above show cause notices were adjudicated by the Lower Authority vide his Order-in-Originals dated 10.06.2011 and dated 31.03.2012. Being aggrieved with the aforesaid orders appellant filed appeals before the Commissioner (Appeals), who vide impugned orders-in-appeal upheld the orders passed by the lower Adjudicating Authority and rejected the appeals filed by the appellant. Being aggrieved by the said impugned orders-in-appeal, appellant filed the present appeals. 3. Shri, Hardik Modh, Learned Counsel appearing on behalf of the appellant submits that it is undisputed fact that the appellant has been registered as non-commercial entity. The appellant has neither declared dividend nor distributed surplus /profit to its shareholders, trustees and / or members but ploughs back the surplus for the purpose of an object of the organ....
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....commercial institution. He placed reliance on the following decision. Dr. Jivraj Mehta Smarak Health Foundation and Medical Centre Vs. C.C., Ahmedabad - 2004(176)ELT 638 (Tri, Mum) Ratan Das Gupta & Co. Vs. Commissioner of Central Excise - 2017 (3) GSTL 247 (T) Vij Construction Pvt. Ltd. Vs. CCE, New Delhi - 2008(11) GSTL 169 (Tri. Del) 3.4 He argued that merely charging fees does not make the entity as Commercial entity. The funds shall be used only for the development of hospital. The Ld. Commissioner (Appeals) ought to have appreciated that in terms of Clause 9 and 10 of Memorandum of Association, the money credited to the fund shall be deposited in bank account and used for meeting the expenses of the society including expenses incurred in exercise of its power and discharge of its functions. He also placed reliance on the following judgments. B.G. Shirke Construction Technology Pvt. Ltd. Vs. CCE 2014 (33) STR 77 (Tri. Mumbai) Commissioner of Service tax Vs. S.M. Sai Construction -2016 (42)STR 716 Institute of Banking personal Selection Vs. Commissioner of S.T. -2007 (8) STR 579. 3.5 He also submits that the Ld. Commis....
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....vernment as mentioned in the letter dated 29.11.2010 issued by the contractor. The Appellant claimed the said refund since the same was paid under mistaken belief of law and borne by the appellant. 4. Shri P.K. Singh, Learned Superintendent (Authorized Representative) appearing on behalf of the Revenue reiterates the findings of the impugned orders. 5. Heard both the sides and perused the records. We find that the refund claims was filed by the appellant for refund of the service tax paid on construction activity undertaken by M/s Desai Construction Pvt. Ltd. (Contractor). Appellant awarded the contract to the contractor for construction of medical college which have been used for providing medical education to the students.The appellant sought refund of tax claiming that this transaction was not liable to tax. The limited issue to be decided in the present appeals is whether the appellant, as recipient of service, is eligible for refund of service tax paid by service provider and whether the appellant can be termed as "non-commercial organization. 5.1 In the present matter disputed service tax amount after recovered from the appellant paid by the contractor to the Governm....
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....ry Scientific and Charitable Society it is clear that the construction of building for which refund claim has been filed is used for educational purpose and the object of the of the use of the building is not for commercial purpose. The certificates and registrations produced by the Appellant clearly established that Appellant i.e M/s Gujarat Adani Institute of Medical Sciences is a charitable trust registered with public trust under the Bombay Public Trust Act, 1950.With all these facts, it is clear that building constructed by the Appellant is not commercial and industrial construction, therefore does not fall under the category of taxable services, as the same is not used for commercial and industry but it is used for providing education. We also noticed that the Appellant have been granted registration of Trust under Section 12AA of the Income Tax Act which shows that Appellant have been registered for non-commercial purpose. Since the organization of the appellant itself is non-profit purpose, it cannot be said that the building is used for commercial activity. Therefore we do not agree with the finding of the Ld. Commissioner that the activity of running medical college is no....
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....that if the building or civil structure was used or to be used not for the purposes of profit then the same are not taxable. When the property in question is not used by Appellant for commercial purpose then it cannot be liable for payment of service tax as is apparent from Circular dated 17-09-2004. It is apparent that C.B.E. & C. circular considered the use of the said property as non-commercial in nature. In these circumstances service tax on construction of said building / property cannot be levied. 5.7 The Lower Authorities have also discarded the status of the appellant as Charitable Trust on the ground that the institution has charged higher fees. We find that merely on the basis of the quantum of fees the status of a charitable institution shall not be altered and the institution which is otherwise statutorily, a charitable trust cannot lose its identity as Charitable Trust. On this basis it cannot be construed that the institution is a commercial institution. This issue has been considered in the following Judgments: Dr, Jivraj Mehta Smarak Health Foundation and Medical Centre Vs. Ahmedabad -2004 (176) ELT 638 (Tri. Mum.) "5. We have heard both sides. ....