TaxTMI 
TaxTMI 
2025 (11) TMI 603
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....stigation pertaining to the works contract service provided by the Respondent to the Bangalore Metropolitan Transport Corporation, Bangalore ( BMTC) for the construction of 'Traffic and Transit Management Centers' (TTMC) at ITPL, Whitefield and Koramangala, Bangalore. In the course of investigation and upon verification of records and statements obtained of the key personnel of the Respondent, it appeared to the Department that apart from bus terminals, the TTMCs included business complexes such as shops, hyper market, dormitory, food court, multi-cuisine restaurant, parking space, advertisement space, ATM counters, book stalls, medicine stores, bank space etc. Only the ground floor of the TTMCs were intended to be utilised for bus terminals and the remaining area of TTMCs were rented out to private parties on rental basis for establishing commercial activities. It was also seen that BMTC had issued a notification dated 07.09.2010 and advertised in the Times of India dated 08.09.2010 inviting the expression of interest from reputed agencies to utilise the space of 1,11,247 square feet and 3,34,568 square feet at TTMCs ITPL Whitefield and Koramangala respectively for commercial use.....
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.... He submitted that going by the records in the impugned case, TTMC as constructed by the Respondent is a modern multi-functional hub integrating bus parking, passenger amenities (ticketing, waiting areas), commercial spaces (retail outlets, offices) and traffic control facilities. While it facilitates transit, it extends beyond pure transport infrastructure by incorporating revenue generating elements like shops and administrative blocks. He would submit that unlike a plain "Transport Terminal", a TTMC does not fall squarely within the exclusionary clause of Section 65 (105) (zzza). The inclusion of commercial/industrial components(e.g., leasing spaces), renders it akin to a "commercial complex", attracting tax under section 65 (105) (zzq) (commercial/industrial construction) or (zzzh) (construction of complex). He submits that a clear absence of a "transport terminal" character, TTMC construction is taxable as a works contract under (zzza). It is further submitted that in cases where facilities blend transport and commercial use, >blanket exemptions merit to be denied. It is also submitted that the Department has adopted the most plausible mode of determining the percentage of ess....
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.... Transit Centre by the Karnataka State Road Transport Corporation and the clarification sent from Chennai Service Tax Commissionerate to CMDA vide letter dated 22.12.2010 as non leviability to service tax fully supports the impugned order. 11. It is also submitted by the Ld. Counsel that the notification dated 07.09.2010 by BMTC to offer additional space to various commercial entities was made at a much later point in time of entrusting the construction work on the Respondent herein, and the taxability was to be determined based only on the terms of the contract entered between the parties as held in various judicial pronouncements. 12. Ld. Counsel further contended that the demand was barred by limitation as the extended period of limitation was not invokable. That there was no finding on this aspect by the original authority solely on account of dropping the proceedings initiated in the SCN on merits in favour of the Respondent and as such the contentions on invoking the extended period of limitation is also urged on behalf of the Respondent. He would also submit that in any event the demand was sustained on the gross value which is untenable considering that the appellant ....
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....act is for the purposes of carrying out,- (a) erection, commissioning or installation of plant, machinery, equipment or structures, whether pre-fabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects; (Emphasis supplied) 18. We also note that Section 65A of the Finance Act for the relevant period, stipulates as under: Section 65A. Clas....
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....t would be done but various value added facilities like shops, food courts, parking space, ATM centres, space for advertisements etc would be constructed within the transport terminal, airport or railway station as the case may be, so that they would serve as a one stop shop for the convenience of the passengers. One cannot imagine construction of transport terminals, airport or railway stations which merely accommodate the buses, aircrafts or trains respectively without any facilities. It can be seen that the basic objective behind the construction of TTMCs is to provide public utility/civic amenities as part of urban infrastructure to ensure good transportation to the people of Bangalore. Only because the transport terminal is constructed, there are other add on facilities provided in the said premises which are incidental to the construction of the terminal. It is not a case where the transport terminal has been constructed for the purpose of accommodating various commercial entities, but, on the contrary, constructed for public utility. Each city or town would be vying with one another to provide excellent infrastructure in this era of competition, which cannot happen without p....
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....ding one stop travel to commuters. The TTMC's comprise of state of art Bus terminal, maintenance facilities, Public amenities, Park and Ride facility and providing inter modal connectivity. In turn, they also directly impact traffic congestion and address environment concerns in the long run. As innovative projects in transportation sector 10 TTMCs projects have been approved by GOI under JnNURM at Jayanagar, Vijayanagar, Banashankari, Koramangala, Shantinagar, White Field (ITPL), Kengeri, Yeshwanthpur, Domlur & Banneraghatta at an outlay of Rs.440 Crores. These works, entrusted on a contract basis, are at various stages of construction and planned to be completed by July 2010. JnNURM projects have equity of 35% GoI, and 15% GoK and balance is borne by BMTC. Apart from this, initiative is being taken to construct another 11 projects in II phase under Public Private Partnership (PPP) for the remaining 35 TTMC Projects. It is seen from the above that TTMCs are nothing but a Transport Terminal with the sole aim of providing various facilities to travelling public. Therefore I hold that the allegation made in the notice that TTMC is not transport terminal is not only ....
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....peal preferred, or at the time of submissions at the Bar. Be that as it may, we find that the said decision is wholly inapplicable as it pertained to an appeal preferred by the Revenue against a refund allowed to the appellant therein who had pleaded that service tax was not payable on construction of road. In fact the revenue's appeal therein was on the sole ground that construction of driveway cannot be equated with the construction of road in as much as such driveway was not for public utility purpose but the same was in connection with the petrol pump owned by the owner. The Tribunal in fact negated the contention holding that it was irrelevant in view of the Board's Circular No. B1/6/2005-TRU dated 27-7-05 referred therein. Thus the finding of the Tribunal in the said decision, apart from being contrary to the contention raised in the present grounds of appeal, is one that does not apply in the facts and circumstances of this case. We find that such reliance placed, is wholly misconceived. 22. Likewise, we find that the reliance on the Board's clarification is also an apparent misconstruction of the same and again without adducing the same either alongwith the appeal or at ....
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....s a State Government Public Transport Service Undertaking and engaged in providing public transportation to the city and sub-urban population in and around Bangalore. It is also conceded in the SCN that as part of the development of urban infrastructure stated in the Comprehensive Traffic & Transportation Plan for Bangalore and vision plan under Jawaharlal Nehru National Urban Renewal Mission, M/s. BMTC Bangalore has started construction of the ' Traffic and Transit Management Centers' in different localities of Bangalore. The funding of the project too is entirely by the Government of India, Government of Karnataka and the aforementioned State Government Public Transport Service Undertaking BMTC in the proportion of 35%, 15% and 50% respectively. In this background, BMTC has contracted the Respondent by way of agreement No.2/08-09 dated 23.07.2008 to construct the TTMCs as per the plan provided by BMTC. The fact that the construction of TTMCs attract the levy of VAT and accordingly the Respondent is discharging its sales tax liability is also not in dispute. It is also seen from the statements given by the Senior Manager (Accounts), General Manager (Finance) of the Respondent that....
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....f interest while exploring options of operating and maintain the commercial space, that cannot be held to the detriment of the Respondent, as it cannot be attributed with the prescience to know what the service recipient, namely, BMTC, is intending to do with the structure it was contracted to construct. Incidentally, the said notification also reflects that BMTC itself has held out that the essential character of the TTMC is that of a Bus Terminal and Bus Depot to provide all facilities/services to the travelling public under a single roof and such portrayal by BMTC also independently corroborates the Respondent's contention that it was under the belief that it is being contracted to construct a bus terminal. 26. Unlike an exemption notification with conditions stipulated therein to claim the exemption, the benefit of which when claimed, puts the burden of proof on the claimant to satisfy firstly that it comes within the ambit of the exemption notification and then to satisfy that it had fulfilled the conditions stipulated therein to secure the benefits; there are no such requirements when the appellant contests taxability, on a belief stemming from the very statutory definitio....
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....lleging that TTMC is not a transport terminal, it is for the Revenue to prove the same. It is a settled principle of law that the onus to prove rests heavily on the person who is alleging it. We find that there is no evidence let in by the Revenue that the law itself empowers revenue to embark on such a methodology of determination of what constitutes a Transport Terminal, much less an evidence let in also to show that the approved plan for construction of TTMC would reflect that the building is primarily to be used for commerce or industry. 28. In any event, we find that the very definition of works contract as reproduced supra, inter-alia, excludes works contract in respect of Transport Terminals from its ambit as a taxable service. When the definition has provided for such exclusion, the legislature has neither provided a definition for the term 'Transport Terminal' nor provided any specifications, restrictions or caveats defining the contours of the said term. In the absence of any such boundaries, the term ' Transport Terminal' cannot be subjected to further dissection in terms of determining its essential character as is being sought to be done by the Revenue. Few settled ....
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....t should not be interpreted in accordance with its definition in another statute that does not deal with a cognate subject. It should be understood in its commercial sense. Unless defined in the statute itself, the words and expressions in a taxing statute have to be construed in the sense in which the persons dealing with them understand, that is, as per the trade understanding, commercial and technical practice and usage." (emphasis supplied) 29. Ergo, when the definition itself does not crimp or confine the exclusion provided to a works contract in respect of Transport Terminal and states that it is to be decided on the basis of area of usage allocated to commercial purpose vis-a vis that utilised for transportation facilities/activities, it is not in the realm or remit of Revenue to impose any such artificial norms to deny the exclusion. We are of the considered view that the mere fact that the TTMC contains commercial areas let out does not divest TTMC of its essential character of a transport terminal, sans any such prescription in the statute. It is a settled principle in law that what is specifically kept out of a levy by the legislature cannot be subjected to t....
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....opriate to ascertain the circumstances that prompted the adjudicating authority to embark upon such a venture. Xxxxxxxx 4. The contract was awarded to the appellant on 30th July, 2009 for a total outlay of Rs. 1,07,21,63,815, as one of the many such across the city of Benguluru, and the demand pertains to the period up to August, 2011. The project was conceived for generating built-up space of 67862 m2 on a site area admeasuring 31862 m2; of the constructed space, the operational area for bus handling was to be 1145 m2, with the Corporation to occupy 10130 m2 and the rest, admeasuring 56587 m2, to be leased out. Learned Authorised Representative pointed out that, according to the adjudicating authority, the substantial utilisation for commercial occupancy sufficed to bring the activity within the compass of '(b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry;' in Section 65(105)(zzzza) and that the expression 'transport terminal' should be read in conjunction with the other activities that were similarly excluded from tax. Even the submission o....
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.... the perceived difference in the meaning of Transport Terminal and Traffic and Transit Management Centre (TTMC) premised on the nomenclatures. The reason being, even without evidence of their provenance by any authoritative citation/dictionary, the incontrovertible fact remains that neither the SCN, nor the grounds of appeal, contain any such differentiation or even any attempt at such differentiation. Again, the contentions of the Ld. A.R. regarding the perceived likeliness of the commercial/industrial components to a "commercial complex" attracting tax under Section 65 (105) (zzq) (commercial or industrial construction) or (zzzh) (Construction of complex) advanced so as to deny the "transport terminal" character to the TTMC, are propositions that do not find any place in the proceedings below or in the grounds of appeal as preferred by the Revenue. Absent any such proposals in the SCN or such a contention raised in the grounds of appeal, premised on such comparisons, Ld. Authorised Representative cannot argue beyond the case made out in the SCN or raised in the grounds urged in appeal, as that would be exceeding his remit. It is a settled principle of law that Revenue cannot argu....
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....e. 35. Before parting, we would like to observe that while the zest in presentation displayed by the learned Authorised Representative undoubtedly is appreciable and which we do appreciate, the zeal ought not to go overboard. We note that, on an earlier occasion, this Tribunal, speaking through one of us ( Shri. M. Ajit Kumar), in the case of M/s. Float Glass Centre v Commissioner of Customs, by Final Order Nos.40870-40987/2025 dated 02.09.2025, was constrained to observe as under: "Before parting it must be said that the role of the Departmental Representative is not merely to represent revenue, but to maintain fairness and impartiality in discharging his duties as an officer of the Court and help in the administration of justice. The Hon'ble Apex Courts observations in the case of Public Prosecutors would also be applicable to them. The Apex Court in Captain Amarinder Singh Vs. Prakash Singh Badal [(2009) 6 SCC 260] held: "We are also of the opinion that the public prosecutor cannot act on the dictates of the State Government, he has to act objectively as he is also an Officer of the Court." 36. Once the Tribunal has indicated its view and expressed that t....