TaxTMI 
TaxTMI 
2024 (8) TMI 1724
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.... for District Office of Food Corporation of India and did not discharge service tax on such services on the contention that being a government building, it is exempted from levy of service tax. (c) The appellant had taken Cenvat credit on capital goods which were not received in their registered premises. Show cause notice dated 19.10.2012 was issued for the period 01.04.2007 to 31.03.2012 raising the above allegations and proposing to demand the service tax along with interest and also to disallow the credit availed on capital goods and recover these amounts along with interest. The show cause notice also proposed to impose penalties. 1.1 After due process of law, the original authority confirmed the demand in respect of construction services provided for private educational institutions. The original authority dropped the demand in respect of construction of educational institutions provided for government and government authorities. The demand raised in respect of construction of buildings for Food Corporation of India was dropped. The demand in respect of credit availed on capital goods was confirmed. Aggrieved by such order of confirmation of demand in respect o....
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....aduari Kamaraj University 9 Vellammal Educational Trust, Chennai (i) Velammal Matriculation School State Board of Tamil Nadu (ii) Velammal College of Engineering and Technology Anna University (iii) Velammal Medical College Hospital & Research Institute' Dr.MGR. Medical University (iv) Vellammal Institute of Technology Anna University 10 North Arcot Educational and Charitable Trust Vellore Vellore Institute of Technology, Chennai VIT University (Deemed University approved by Govt, of India) 11 Aryanet Trust, Palakkad (Reg.No:99/2010) Aryanet Institute of Technology, Palakkad APJ Abdul Kalam Technology University (KTU) (Approved by All India Council for Technical Education (AICTE) 12 Sree Krishna Education Trust College of Agriculture Technology, Theni Tamil Nadu Agricultural University 3. It is pointed out by the Ld. Counsel that the department does not dispute the construction services were provided to educational institutions. The adjudicating authority has dropped the demand in respect of educational institutions constructed for governm....
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....llant has availed credit of capital goods used at the construction site and was under bonafide belief that it is eligible. 7. The Ld. Counsel argued on the ground of limitation. It is submitted that the demand has been raised invoking the extended period alleging that the appellant has suppressed facts with intent to evade payment of service tax. The department has not brought forth any evidence to establish suppression on the part of the appellant. Further, the issue as to whether service tax is to be paid for construction services of educational institutions is interpretational in nature. The Board vide Circular dated 17.09.2004 had occasion to clarify the same. This indicates that the issue is purely interpretational in nature. It is prayed that the demand may be set aside on the ground of being time-barred. The Ld. Counsel prayed that the appeal may be allowed. 8. The Ld. AR Ms. O.M. Reena appeared and argued for the department. The findings in the impugned order was reiterated. It is submitted that after considering in detail, the adjudicating authority has dropped the demand in respect of construction services provided for Food Corporation of India as well as the educat....
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....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 o (d), oration of, or similar services, In relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects. Sub clause b of Section 65 (105) (zzzza) of the Finance Act 1994 states that if the construction is for the purpose of commerce or industry the services of Construction of Civil structure would be covered by the definition. The board vide its circular dated 17.09.2004 has clarified the same. 12. The Tribunal in the case of M/s. RR Thulasi builders India P Limited had occasion to consider the very same issue and after referring to the Board's Circular and various other decisions has set aside the demand for const....
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....ad. The tax is limited only in case the service is provided by a commercial concern. Thus service provided by a labourer engaged directly by the property owner or a contractor who does not have a business establishment would not be subject to service tax. 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 approvedplan of the building or civil construction. Such constructions which are for the use of organizations or institutions being established solely for educational, religious, charitable, health, sanitation or philanthropic purposes and not for the purposes of profit are not taxable, being non-commercial in nature. Generally, government 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 purposes like local government bodies getting shops constructed for letting them out, such activity would be commercial and builders would be subjected to....
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.... 29-2-1996 7 8/2/96-ST 11-3-1996 8 9/3/96-ST 11-3-1996 9 13/7/96-ST 20-9-1996 10 15/9/96-ST 4-10-1996 11 16/10/96-ST 15-10-1996 12 19/13/96-ST 21-11-1996 13 20/14/96-ST 31-12-1996 14 21/1/97-ST 27-1-1997 15 F. No. B. 43/7/97-TRU 11-7-1997 16 F. No. 148/3/97-CX4 9-9-1997 17 23/3/97-ST 13-10-1997 18 F.No. 354/128/97-TRU 18-12-1997 19 25/2/98-ST 23-7-1998 20 26/3/98-ST 10-9-1998 21 27/1/99-ST 19-5-1999 22 28/2/99-ST 4-7-1999 23 30/1/2000-ST 5-6-2000 24 31/2/2000-ST 31-7-2000 25 34/2/2001-ST 30-4-2001 26 36/4/2001-ST 8-10-2001 27 37/5/2001-ST 27-12-2001 28 38/1/2002-ST 7-2-2002 29 39/2/2002-ST 20-2-2002 30 42/5/2002-ST 29-4-2002 31 45/8/2002-ST 30-7-2002 32 48/10/2002-ST 13-9-2002 33 51/13/2002-ST 7-1-2003 34 53/2/2003-ST 27-3-2003 35 54/3/2003-ST 21-4-2003 36 55/4/2003-ST 24-4-2003 37 56/5/2003-ST 25-4-2003 38 57/6/2003-ST 20-5-2003 39 64/13/2003-ST 28-10-2003 40 65/14/2003-ST 5-11....
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.... even in these cases the classification should be under Works Contract and demand differential Service tax for the past Five Years. 5. When the Builders have filed their ST3 returns disclosing all the details and their units subjected to frequent audit by the Department in which all the above aspects have been thoroughly examined and no objection raised, can Service Tax now be demanded on the above two issues for the past five years invoking the provisions of Section 73 (10 of the Finance Act, 1994. Reply to Query : 1. As per Board's Circular No.80/10/2004-ST dated 17.09.2004, the constructions which are for the use of organizations or institutions being established solely for educational, religious, charitable, health, sanitation or philanthropic purposes and not for the purpose of profit are not taxable, being non-commercial in nature. 2. The said Board's Circular dated 17.09.2004 (not 10.09.2004 as you have mentioned), has not been withdrawn and is in force at present." (emphasis supplied) 12. From the above, it can be seen that the department itself has taken the view that the circular dt. 17.09.2004 is still in forc....
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....2/A dated 27.05.2009, issued by the Government of Gujarat, Certificate dated 26.05.2009 issued by the Registrar under the Registration of the Societies Act, 1860, Certificate dated 26.05.2009 issued under the Bombay Public Trust Act, 1950, Registration under Section 12AA of the Income Tax Act, 1961 and Memorandum of Association framed under the Act XXI of the Registration of the 1860 for the registration of Literary 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 Appell....
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....n Para 13.2 clarified that the leviability of Service Tax was primarily dependent upon the use of the building or civil structure. Further, it clarified that it was to be ascertained where building or civil structure was used or to be used for commercial or industrial purpose and further required to gather the information as to whether the buildings or civil structures were being used or to be used for the purpose of making profit or not and clarified 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." 15. In the case of KMV Projects Ltd. v. CCE & ST Hyderabad - 2019 (27) G.S.T.L. 388 (Tri.-Hyd), the issue considered by the Tribunal was whether construction of guest house for temples at Srisailam, Kanipakam and also educati....
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....s that it has been established in the year 1971 as a major industrial unit of Department of Atomic Energy, Govt. of India and the complex is responsible for supply of fuel and reactor core components for all the nuclear power reactors operating in India. The said NFC has been clearly indicated as a Unit of Department of Atomic energy, Govt. of India. As regards the C-DAC, it is indicated in the profile of C-DAC that it is a premium R & D organisation of the Ministry of Electronics and Information Technology (MEIT) for carrying out R&D in IT, electronics, and associated areas. It can be seen from the said profiles of 2-3 units that they are all units of Govt. or local authority of Govt. authorities and cannot be considered as primarily engaged for the purpose of commerce or industry. Learned AR relied upon some balancesheet of C-DAC to state that they were profit making units to press his argument that they are commercial and industrial purposes. We find that such allegations were not there in the show cause notice and not supported also. We find that the Tribunal in the case of Ratan Das Gupta & Co v. CCE, Jaipur [2017 (3) G.S.T.L. 247 (Tri.-Del) ] and Commissioner of Service Tax v....
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....13(c) has very clearly recorded that the services rendered to "building owned by an entity registered under Section 12AA of the Income-tax Act and predominantly for religious use of general public are exempted." The Revenue's reliance on the decision of the TTDC case may not carry their case any further as the issue was different in that case. 13. Since we have disposed of the appeal on merits itself we are not recording any findings/observations on the various other submissions made by both sides; as also on limitation." 16. The Tribunal in the case of Vijayadeepa Constructions Private Ltd. v. CGST & Central Excise, Coimbatore vide Final Order No.40536/2024 dt. 08.05.2024 had also considered the very same issue and after referring to the Circular issued by the Board set aside the demand. Relevant paras read as under : "12. The second issue is with regard to demand under 'Works Contracts Service' provided for construction of Engineering College to M/s.KTVR Siddhammal Charitable Trust. The department does not dispute that the building has been used solely for the purpose of Engineering College. So also, the said college is recognized by the AIC....
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....n nature as there have been several litigations. The Board has also come forward to clarify the nature of construction services when provided to educational institutions. In such circumstances, there are no grounds for invoking the extended period and we hold the demand is time-barred. The issue of limitation is answered in favour ofthe appellant and against the Revenue. 19. In the result, the impugned order is set aside. The appeal is allowed with consequential relief, if any." 13. After considering the facts as above and also following the decision in M/s. RR Thulasi builders India P Limited, we are of the view that the demand of service tax for providing construction educational institutions cannot sustain and requires to be set aside. Ordered accordingly 14. The second issue is with regard to disallowance of credit on capital goods. The Ld. Counsel has submitted that the appellant is not contesting this issue. The demand in respect of credit availed on capital goods is sustained along with interest. 15. In Cenvat Credit Rules, Rule 3 (xi) (i) was amended w.e.f. 20.06.2012 by which the word 'registered premises' was omitted and the word 'by' was....