AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2026 (4) TMI 67
X X X X Extracts X X X X
X X X X Extracts X X X X
....the part of the demand. 2. The brief facts are that the assessee, M/s. Ajab Singh & Co., is a sole proprietorship concern of Mr. Ajab Singh, having his registered office at Village Gokulpur, Wazirabad Road, Shahdara, Delhi-110094. The assessee was registered with the Service Tax Department vide registration no. AKDPS2160CSD001 dated 04.03.2010, under the taxable category of 'Renting of Immovable Property Services'. Up to 31.03.2009, the assessee carried on the business of civil construction under the proprietorship concern M/s. Ajab Singh & Co. With effect from 01.04.2009, the said proprietorship concern was converted into a partnership firm M/s. Ajab Singh & Co. having its registered office at Khasra No. 299, Village Gokulpur, Wazirabad Road, Shahdara, New Delhi-110094. Intelligence was gathered by the Service Tax Department to the effect that the assessee was engaged in the provision of construction services but was not discharging the service tax liability on the consideration received from its clients. Based on such intelligence, the present proceedings were initiated against the assessee for the period 01.04.2006 to 31.03.2011. Consequently, a Show Cause Notice dated 19....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the absence of proper classification, the entire basis of demand collapsed. Further, the fact that there was no classification in the show cause notice gets confirmed from the impugned order. Learned counsel contended as regards the construction of EWS houses including internal development and electrification, the assessee had admitted the demand of service tax in respect of contracts awarded for construction of EWS houses and upgradation of 476 houses, and discharged the payment of service tax of Rs. 34,54,868/-(after deducting the value of material involved in the contract), which has duly been appropriated vide the impugned order. The community hall was constructed by the assessee for the occupants, and the said construction was non-commercial in nature. The demand has been raised by invoking the extended period of limitation under the proviso to Section 73 of the Finance Act, 1994. The invocation of extended period is wholly unjustified, in as much as there was no suppression, fraud, or wilful misstatement on the part of the assessee. 4. Learned Special Counsel for the Revenue submitted that the Department's investigation covered both the proprietorship concern (before 0....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... No. 25/2012-5T dated June 25, 2012. However, this argument cannot be accepted, as the DDA is engaged in both commercial and non-commercial activities. Furthermore, as the appellant has sought an exemption, the responsibility to prove that the work contracts executed for DDA are non-commercial lay with him, which has not been satisfied. 5. We have heard the learned counsel for the assessee and the learned Authorized Representative appearing for the Revenue and have perused the entire records. We shall deal with each appeal individually. 6. Service Tax Appeal No. 51841 of 2018 has been filed by the assessee against the order in original 11/ST/Commr/MRR/2015-16 dated 27.3.2018 wherein the Commissioner has confirmed the demand of Rs. 25,99,345/- against the proprietorship concern and Rs. 69, 70,727/- against the partnership firm along with interest and penalties. 7. We note that this is second round of litigation wherein the Commissioner has adjudicated consequent to the remand order of this Tribunal. It would be appropriate to reproduce the said remand order. "5. It is the contention of the appellant that show cause notice has been issued to diff to 2 different pers....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 95,70,072 8. Ld Counsel has submitted that the show cause notice had been issued in the name of M/s Ajab Singh & Co.(Proprietorship concern) for the period after 01.4.2009 whereas the said proprietorship concern had ceased to exist consequent to the partnership firm that had come into operation. we note that it is an admitted fact that post 1.4.2009, the said proprietorship concern had been converted into a partnership firm, and the Tribunal vide its remand order has held that a single show cause notice addressed to the partnership firm and proprietorship concern was not 'executable'. The Tribunal went on to give liberty to the Department to issue a fresh notice. We note that the impugned order in Para 4.1.4 has recorded the said direction. The said para is reproduced for ease of reference: "4.1.4 Hon'ble Tribunal under Final Order No.58122/2013 dated 23.10.2013 remanded the matter to the Commissioner to decide the matter afresh after affording an opportunity of hearing to the appellants. The following were the observations in the remand order: i. Demanding ST in a single SCN/O-in-O by the Department from the partnership firm as well as proprietary firm ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ble. It is perhaps important to note here that Proprietorships are not separate legal entities from the proprietor, who bears full personal liability whereas partnership firms are distinct assessable units with their own PAN and Registration numbers. 11. Further, we find it pertinent to note here that the remand order of the Tribunal was very specific in its finding that a single show cause notice is not sustainable. We are pained to note that despite the Tribunal giving liberty to the Department to issue a fresh Show Cause Notice, there is nothing on record to indicate that a fresh show cause notice was issued addressed to the partnership firm, in compliance to the Tribunal's remand order. In the absence of a fresh notice, we hold that the demand for the financial years 2009-10 and 2010-11 cannot be sustained. We draw support from the decision of the Apex Court in Union of India versus Kamalakshi Finance Corporation Limited [1991 (55) ELT 433 (S.C.)] wherein it was laid down that principles of judicial discipline require that the orders of higher appellate authorities should be followed unreservedly by the subordinate authorities unless its operation is suspended by a competent....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elopment Authority versus Commissioner, CGST, Ghaziabad vide Final Order No. 70787/2025 dated 13.11.2025, the Tribunal upheld the demand of service tax on construction of community hall. Consequently, we uphold the demand on the said issue. 15. Construction of 200 fruit and vegetable stalls : A perusal of the relevant contract No. Wd-6 C/o 200 fruit and vegetable stalls i/c internal development, Nasirpur, Dwarka reveals that the assessee was engaged to carry out relevant internal development of fruit and vegetable stalls. It is obvious that such stalls have a clear commercial use and cannot be considered to be non-commercial. Hence, we uphold the demand in this regard as well. 16. Service Tax Appeal No. 52151 of 2018:- This appeal has been filed by the Department against the impugned order. The main issues for our consideration are as follows:- (i) whether the TDS amount is includible in the gross amount chargeable to service tax? (ii) whether deducting security amount for computation of taxable values is correct? (iii) whether construction of Boundary Walls is exigible to service tax? (iv) whether construction of sport complex was exigible....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned Counsel took us through the facts of the case and submits that the agreement entered by the appellant with the foreign architect is very clear as the said agreement states that amount to be paid by the foreign architect not to be taxed i.e. by the appellant. He would take us through the agreement and bring to the notice specific clauses; appellant has discharged the Service Tax liability on the actual amount paid by them to such consultant. He would then take us through the provision of Section 67 of the Finance Act, 1994 and submit that the said Section contemplates discharge of Service Tax liability on the gross amount charged by the service provider. He would submit that the architect has charged the gross amount that indicated in the agreement. Subsequently, learned Counsel would take us through the provision of Service Tax (Determination of Value) Rules, 2006, as per Rule 7during the relevant period, the provisions were very clear as to actual consultant charges need to be taxed. For this purpose, he relied upon the judgment of the Tribunal in the case of Commissioner of Central Excise, Raigad v. Jawaharlal Nehru Port Trust P. Ltd. - 2015 (40) S.T.R. 533 (Tri.-Mumbai)." ....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... We further note that the appellant has submitted certificates from the DDA, that the Boundary walls/facing was to prevent encroachment of DDA land-which is public property. Consequently, we are unable to accept the Department's contention in this regard. We hold that the adjudicating authority has rightly appreciated the facts and held that such works to be exempted from service tax. 22. Construction of Sports complex:- the Department has opined that there were commercial shops and constructions within the sports complex and hence the exemption was not available. We find that this view is not correct. It is essential at this juncture to note that sports complex is built for public use. The primary intent of a sport complex is non-commercial. We draw support from the decision of this Tribunal in M/s Laing Simplex JV versus Commissioner of Central Excise and Service Tax, wherein it was held that construction services for mega sports complex, despite including amenities like restaurants, guest houses are exempt, as the primary intent is not commercial. The relevant paras are reproduced hereinafter:- "8. We observe that the issue to be decided in the present appeal is whe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y make the Sports complex is meant for commercial purposes. Accordingly, we are of the view that the activity of the Appellant are covered under Clause (b) of the definition of 'Works Contract Service' mentioned above. We observe that this view has also been taken by the Hon'ble Bombay High Court in the case of CCE&ST Pune Vs B J Shirke Construction Technology Pvt Ltd [2019 (25) GSTL 8 (BOM)]. The relevant part of the decision is reproduced below:- "13. There is no dispute that the plot of land on which the stadium is constructed is owned by Government of Maharashtra. The record maintained by the local authorities would indicate that the plot is for public welfare use and not for residential or commercial purpose. The question that arises for consideration is whether, user of the stadium area to the extent of 1/3rd of the total area for commercial purpose would tantamount to 'commercial or industrial construction service' as defined by Section [65(25b)] of the Finance Act, 1994. It is not even the case of the appellant that the stadium is exclusively used for commercial purpose. Relying on materials which indicate that 1/3rd of the area of the stadium can be ut....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n uses the words "used or to be used primarily for commerce or industry" clearly indicating that the user is to be exclusively for commercial purpose or at least it must be primarily for commercial purpose. The definition leaves us in no manner of doubt that if the predominant user of the "sports stadium" is not commercial, then the same cannot be subjected to levy of service tax. Thus, in the facts of the present case, though an area to the extent of 1/3rd is used for commercial purpose prescribing separate rates for such user, this by itself is not sufficient to attract service tax. 18. Even the circulars issued by the Board dated 17-92004 and 10-2- 2012 would indicate that only if such constructions are for commercial purposes, like, local government bodies constructing shops for letting them out, such activities would be commercial and builders would be subjected to service tax. The Director of Sports and Youth Services, Pune in his Affidavit filed before the authorities on earlier occasion has deposed that the stadium will be continued to be used for the non-commercial purposes even after the Commonwealth Youth Games, 2008 are over. The materials on record do not sati....