TaxTMI 
TaxTMI 
2026 (1) TMI 583
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.... capacity of contractor for construction/laying of new roads and certain other construction related works for M/s Tirumala Tirupati Devasthanam (TTD) and the trust managed by the Holy Venkateshwara Temple. The TTD trust is also involved in various social, religious and educational activities for the benefit and upliftment of the Tirumala region and for the society at large. TTD is not for profit society and is established under State enactments solely for the aforesaid religious and charitable purposes. The appellant undertook the following construction work for TTD: (i) Construction of Girls Hostel at SVIMS, Tirupati. (ii) Beautification of Narayanagiri Gardens & Alwar water tank at Tirumala from Walden Properties Ltd., (iii) Construction of S.V. Ayruvedic Hospital, Tirupati. (iv) Construction of Pilgrim Shelter at Tirumala. (v) Construction of footpath for queue line at Tirumala. (vi) SMC cottage improvement work, Group-1 and Group-2 at Tirumala. 3. The appellant, as a sub-contractor for M/s GKC Projects Ltd., on back to-back basis undertook a project for development and improvement of the land for agricultural purpose, viz....
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....ocial, economic, religious and environmental needs of the people, especially the needy. For this purpose, TTD has undertaken several activities and has initiated different schemes in various areas. The entire activity carried on by TTD is solely for non-commercial purposes. A) Construction of Girls Hostel at the Sree Venkateswara Institute of Medical Sciences, Tirupathi (SVIMS) 9. Learned Counsel for the appellant submits that the SVIMS was established in 1993 under the aegis of Tirumala Tirupati Devasthanams with a view to providing quality medical care at a nominal cost to the poor and needy. In 1995, SVIMS became a University by an ACT of Andhra Pradesh State. In 2006, the Government of India included SVIMS as one of the institutions for up-gradation at par with All India Institute of Medical Sciences (AIIMS), New Delhi. SVIMS was constituted for a charitable and educational purpose for a non-commercial and non-industrial purpose. The hostels are provided to students who are eligible for scholarships by virtue of getting the top ranks in the competitive examinations conducted by the Institute. The Institute provides these hostels on a very nominal charge of Rs. 300/- per m....
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....h Court of Madras in the case of G. Ramamoorthy Constructions (I) Pvt. Ltd. v. Commissioner, 2015 (40) S.T.R. 632 (Mad.) also held that the construction service for hostel and educational institutions cannot be considered as commercial in nature and hence the same cannot be subjected to service tax. Learned Counsel relied on the following decisions: (i)CCE v. Vishnu Saran & Co., 2025 (5) TMI 1829 - CESTAT Allahabad (ii) Katira Construction Ltd v. CCE, 2024 (11) TMI 349 - CESTAT Ahmedabad (iii) R.R. Thulasi Builders (I) P. Ltd. v. CGST & CE, 2024 (7) TMI 1067 - CESTAT Chennai (iv) Vij Constructions Private Limited v. CCE, 2018-VIL-1312-CESTAT-DELST (v) CCE v. B.J. Shirke Construction Technology Pvt Ltd., 2019-VIL-115BOM-ST B) Construction of Second Floor over SV Ayurvedic Hospital for TTD 10. Learned Counsel for the appellant submits that SV Ayurvedic Hospital provide medical facilities to various people free of cost, making medical facilities available to all sections of the people. The sole objective of construction of the hospital is, to provide medical facilities free of cost, so that the medical facilities are available to peop....
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....struction of guest houses and temple complex (multi-storied complex) for purpose of public use in religious institution fell under exclusion clause of works contract services and tax liability would not arise. D) The Development Work Carried Out On Agricultural Lands. 12. Learned Counsel for the appellant submits that the Activity undertaken by the Appellant for M/s. GKC Projects Limited for development of land for agricultural purposes, the SCN Proposed the demand under the category of WCS, but the demand has been confirmed under 'Site Formation and clearance, excavation and earth moving and demolition services' under Section 65(97a) of the Finance Act. Such a classification in the impugned order travelling beyond the scope of the SCN and the change in category of service is not sustainable. Reliance in the regard is placed on the following decisions: (i) Purushotham Reddy v. Commr. of Central Tax, 2025 (3) TMI 678 - CESTAT Hyderabad (ii) Balaji Contractor v. CCE, 2017 (3) TMI 181 - CESTAT New Delhi (iii) Kalpataru Power Transmission Ltd, 2019 (7) TMI 503 - CESTAT Ahmed (iv) Goyal & Co Construction Pvt. Ltd, 2023 (7) TMI 1020 - CESTAT Ahme....
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....sition scheme as the impugned order levied/confirmed demand on the entire value of works at the rate of 10.36% without providing for any deduction towards the value of material. However, the impugned order confirmed the demands under the category of WCS. It is submitted that having confirmed the demand under WCS, which undisputed involves transfer of property subject to VAT and the Ld. Commissioner has also deducted the VAT amount paid from the gross amount for arriving at the taxable value, so, towards value of material deduction ought to have provided in terms of Notification No.12/2003. Alternatively, the appellant is also eligible for the benefit of composition scheme by virtue of Notification No.32/2007-ST dated 22.05.2007. 19. Learned AR for the Department reiterates the findings given by the Adjudicating Authority, as well as argued that the agreement between main contractor and appellant was provided that any Central and State taxes on completion of work may be levied and paid. Therefore, appellant is liable to pay Service Tax as decided by Adjudicating Authority. 20. Heard Learned Counsel for the appellant Ch. Sumanth and Learned Representative of the Department Shri....
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....s in this regard to the department." 24. The Co-ordinate Bench, Delhi, in the case of Jyoti Sarup Mittal, supra, held that construction activity done for universities like constructing hotel, staff quarters etc., would be in the nature of non-commercial activities and hence, would not be leviable to Service Tax. The relevant para of the judgment as follows: "7. In the instant case, it appears that the entire construction services are meant for educational institutions or for the welfare of the State which are not commercial or industrial in nature. The Board Circular No. 80/2004S.T., dated 17.09.2004 clarifies the "Constructions Services (commercial and industrial buildings or civil structures)" as under: "13.2 The leviability of Service Tax would depend primarily upon whether the building or civil structure is 'used, or to be used' for commerce or industry. The information about this has to be gathered from the approved plan of the building or civil construction. Such constructions which are for the use of organizations or institutions being established solely for educations, religious, charitable, health, sanitation or philanthropic purposes and not for the p....
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.... buildings or civil constructions are used for residential, office purposes or for providing civic amenities. Thus, normally government constructions would not be taxable. However, if such constructions are for commercial purpose like local Government bodies getting shops constructed for letting them out, such activity would be commercial and builders would be subjected to Service Tax." 29. Therefore, Health institution which is not for commercial purpose would not be taxable. Therefore, the demand regarding construction of second floor over SV Ayurvedic Hospital for TTD also not sustainable. 30. As far as SMC Cottage Improvement Work undertaken by the appellant for TTD. These cottages are provided to various devotees visiting Tirumala Tirupati for the darshan, charges are collected only for maintenance expenses. Thus, these cottages are constructed for non-commercial purpose, therefore, construction of cottages are not taxable as per above mention circular. 31. Even, this Tribunal in the case of KMV Projects Ltd., supra, held that any construction which is for non-commercial or non-industrial purposes, Service Tax liability under works contract service will not arise. The....
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....Appellant was never put to notice that the demand is going to be confirmed under the category of 'Construction of complex service'. They were issued notice seeking as to why the demand should not be confirmed under the category of 'Works Contract service'. Therefore, they are defending the demand made under the category of Works Contract, without taking any defence on account of Construction of Complex service. Hence, we take the view that the appellant was not put to notice before the Adjudicating Authority had confirmed the demand under the category of 'Construction of Residential Complex service'. We find that in the case of M/s P.K. Agarwalla Vs CCE & ST, Kolkata (cited supra), the Kolkata Bench of this Tribunal has held as under: "8. As in this case, Show Cause Notice proposes to demand of Service Tax under the "Mining Service" which the Adjudicating Authority has held that the demand is not sustainable under Section 65(105)(zzzy) of the Finance Act, 1994 which means that the activity undertaken by the appellant does not fall under "Mining Service". But the Adjudicating Authority has gone beyond the scope of the Show Cause Notice by holding that the activity undertake....