TaxTMI 
TaxTMI 
2026 (7) TMI 654
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....PHCL), Agriculture Produce Market Committee (APMC), GETCO etc. At the relevant time, the respondents were not registered with service tax department nor they were paying service tax in respect of services provided. 2.2 Information/ intelligence was gathered that respondent was providing service in relation to Construction of Complex service and other services under Works Contract to GSPHCL. An enquiry was initiated and summons dated 13.08.2012 was issued asking them to appear in person on 23.08.2012 and summons dated 11.09.2012 was issued requiring them to appear in person on 20.09.2012 to produce the requisite documents/ details for the last five years. 2.3 The respondent vide letter dated 25.09.2012 & 11.04.2013 provided certain details and documents. Statement of respondent Shri Paresh S. Patel, Proprietor was recorded on 21.10.2013 and he was asked provide relevant explanation in respect of documents and information provided by him. 2.4 On scrutiny of documents, detailed statement of the respondent, the department was of the view that respondent had carried out financial activity in relation to Construction of various residential quarters for GSPHCL and execution of wo....
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.... cause as to why:- (i) Service tax of Rs. 2,60,54,847/- (Rupees Two Crore Sixty Lakhs Fifty Four Thousand Eight Hundred Forty Seven only) towards the taxable service provided in relation to works contract service under sub-clause (zzzza) of clause (105) of section 65 of the Act should not be paid by them under the proviso to sub-section (1) of section 73 of Chapter V of the Act by invoking the larger period of five years; (ii) service tax of Rs. 5,28,334/- (Rupees Five Lakh Twenty Eight Thousand Three Hundred Thirty Four only) towards the taxable service in relation to goods transport agency service under sub- clause (zzp) of clause (105) of section 65 of the Act read with Notification No. 6/2004-Service Tax dated 31.12.2004 should not be paid by them under the proviso to sub-section (1) of section 73 of Chapter V of the Act; (iii) interest at the applicable rate should not be paid by them under the provisions of Section 75 of the Act; (iv) penalty for contravention of the provisions of sub-section (1) of section 68 of the Act should not be imposed upon them in terms of the provisions of section 76 of the Act; (v) penalty for contraventi....
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....y in the matter and are pending in appeals at various forums. 3.1 We have heard Shri Neilprakash G Makwana, Authorized Representative (AR) for the Revenue and Shri Jigar Shah and Shri Amber Kumrawat, Advocates for the respondent. 3.2 Arguing for the Revenue, Authorized Representative reiterated the grounds taken in the appeal filed by the Revenue. He submitted that the adjudication order which has been passed ignoring the above stated grounds, should be set-aside. 3.3 Learned Counsel for the respondent submitted that ➢ the services for construction of residential complexes rendered by the Respondent to various Governmental bodies and governmental departments were wrongly classified under the taxable category of 'works contract service' under section 65(105)(zzzza) of the Act. Thus, the Impugned Order has rightly dropped the entire demand of service tax. ➢ The construction works carried out for APMC are not for the purpose of commerce or industry. Thus, no service tax is leviable under the taxable category of 'works contract services'. ➢ The construction activities carried out for GETCO Mehsana were wrongly classified ....
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....complex or a part thereof; or (b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex. and as per clause (91a) of section 65 of the Act, "residential complex" means any complex comprising of- (i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as re....
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....onstruction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purpose 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. 26.4 As per sub-rule (1) of rule 3 of the Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007, as amended a text of which is reproduced as under: "Notwithstanding anything contained in section 67 of the Act and rule 2A of the Service (Determination. of Value) Rules, 2006, the person liable to pay service tax in relation to works contract service shall have the option to discharge his service tax liability on the works contract service provided or to be provided, instead of paying service tax: at the ate specified in section 66 of the Act, by paying an amount equivalent to two per cent (four per cent with effect from 01.03.2008 vide Notification No. 7/2008S....
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....vice is liable to service tax, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as residence by such person as per above referred in the definition. In other words, if a residential unit is intended for personal use, then it should be excluded from the service tax chargeability. Further, the term "personal use" is defined in the explanation(a) of the said law which includes permitting the complex for use as residence by another person on rent or without consideration. Therefore, in the present case, a limited point of consideration is to determine whether the term "Personal Use" is involved or otherwise. 27.2 As per the facts of the case, I have noted that M/s Paresh S Patel was the proprietary concern of Shri Paresh S Patel, engaged in the activity of providing the construction services to government organization like Road & Building Department, Irrigation Department, Gujarat State Police Housing Corporation Spreading Canal, Commissionerate of Health (Project Implementation Unit) and PMGSY department, Sardar Sarovar N....
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.... government department for the personal use; wherein the appellant was engaged in construction of residential quarters of Income Tax Department and in that Hon'ble Tribunal held as under "3. We have considered this submission. We find ourselves in agreement that the contention of the learned advocate that service has been provided by the appellant to Govt. of India in this case and CPWD and Income Tax department cannot be treated as separate entities just because service has been provided to CPWD who in turn handed over the same to Income Tax department. Further, learned advocate also drew our attention to the notice issued by the CPWD inviting tenders. The tender starts with words "Tenders are invited on behalf of the President of India". Further, we also find that the guarantee executed by the contractor and agreement entered by the contractor have been accepted by CPWD for and on behalf of the President of India. Learned DR also fairly admitted that he has not got any clarification from the department as to whether there is any evidence to show that CPWD and Income Tax departments are separate entities and have to be treated as separate entities. It is well known th....
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....tended for personal use as residence by such person. Explanation - For the removal of doubts, it is hereby declared that for the purposes of this clause - (d) "personal use" includes permitting the complex for use as residence by another person on rent or without consideration; (e) "residential unit" means a single house or a single apartment intended for use as a place of residence."] We have already explained the submission of learned advocate in brief and as explained by him in this case, residential complex constructed by the appellant is meant for use by the Income Tax department to provide the same on rent to the employees and therefore, it is clearly covered by the explanation given for "Personal use" in the definition. In this case the CPWD has engaged the appellant for construction of residential complex for giving it on rent to the employees of Income Tax department and therefore this service cannot be included in the definition of residential complex services. It is basically the case of one department taking the help of another department to get the work done basically because of specialization of that department in preparing document....
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....residential complex'. Residential complex defined under Section 65(91a) exclude buildings which are intended for personal use as residence and residence constructed by a person directly engaging any other person and the construction of such complex is entitled for personal use as residence by such person. We find that NTPS have constructed residential quarters for their own purpose i.e. for their own employees. Therefore, this activity is clearly outside the scope of Construction of Complex service and not leviable to service tax." 28.5 My findings are further strengthened by the decision of Principal Bench, New Delhi in case of Murari Lal Singhal Vs Commissioner of Central Excise, Jaipur {2019 (25) GSTL 45 (Tri-Del)], where the bench has observed as below: "7. Now coming to activities at serial Nos. (c), (d) & (e) above : We observed that the appellant has constructed individual houses for Rajasthan Housing Board, quarters at DCCPP, Dholpur and quarters for officers of RRVUNN. From the work orders executed in this respect it is apparent that these quarters were got constructed by the respective Government Departments for being used for their own employee....
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.... appellant for three different Departments of Government of Rajasthan for being used as accommodation for their own employees, the same amounts to 'personal use'. The confirmation of demand qua these services by the Commissioner is therefore not sustainable, accordingly is set aside." 28.6 Further while dealing with the taxability on the quarters constructed for the army personal in the case of Baba Constructions Pvt Ltd. V Commissioner of Central Excise Ghaziabad [2018 (15) GSTL 345 (Tri-All)] it was held by Allahabad bench of Hon'ble Tribunal- "6. So far construction of 144 and 72 multi-storied residential units in Rajendra Nagar with respect to contract awarded by Ghaziabad Development Authority is concerned, it is submitted that there are only six units in a block constructed. For the purpose of taxation under the classification Construction of Residential Complex Service under Section 65(105)(zzzh), is taxable if 12 or more units are constructed in one single block. This issue is no longer res integra and have been decided by a Coordinate Bench of this Tribunal in the case of Macro Marvel Projects Ltd. v. Commissioner of Service Tax, Chennai reported at 2008 ....
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....d therefore, it is clearly covered by the explanation given for "Personal use" in the definition. In this case the CPWD has engaged the appellant for construction of residential complex for giving it on rent to the employees of Income Tax department and therefore this service cannot be included in the definition of residential complex services. It is basically the case of one department taking the help of another department to get the work done basically because of specialization of that department in preparing documents and get the work executed. 6. We note that in the said case of Khurana Engineering the construction was done by M/s Khurana Engineering and contract was awarded to M/s Khurana Engineering by CPWD and CPWD was engaged by Income Tax department for construction of quarters to be used as residences by the staff. Therefore, the ratio of the decision of this Tribunal in the said case of M/s Khurana Engineering (supra) is squarely applicable in the present case. Further, this being a case of demand, the onus was on revenue to establish that the residential units constructed by the appellant were covered by the definition of residential complex to raise the demand....
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....value is after 01.06.2007. TNPHCL engaged the appellant for construction of Police Quarters and the ownership of the houses constructed vested with the Govt. of Tamilnadu which is nothing but an extended arm of the Govt. Section 65 (91) (a) of the Finance Act, 1994 defines residential complex. The said definition excludes personal use. The Tribunal in a similar set of facts had considered the issue and set aside the demand vide Final Order in SIMA Engineering & Constructions (supra). The relevant portion is noticed as under:- "7. Undisputedly, the appellants have entered into an agreement with TNPHCL for providing services in relation to construction of residential complex. However, these are meant for use of police personnel. The said issue was considered by the Tribunal in the case of Nithesh Estates (supra), wherein the Tribunal has observed as under:- "7.1 In this case there is no dispute and it clearly emerges that the residential complex was built for M/s. ITC Ltd. and appellant was the main contractor. Appellant had appointed sub-contractors all of whom have paid the tax as required under the law. The question that arises is whether the appellant is liable ....
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....uld be no liability of service tax at all. Further in this case it was different totally, the appellant, has engaged sub-contractors and therefore rightly all the sub-contractors have paid the service tax. In such a situation in our opinion, there is no liability on the appellant to pay the service tax" The above definition specifically excludes construction undertaken for personal use and such personal use includes permitting the complex for use as residence by another person. We find that the above exclusion clause covers the construction activity undertaken 5 by the assessee. Following the said decision, we are of the view that the demand after 01.06.2007 also cannot sustain and requires to be set aside, which we hereby do. 6. In the result, the impugned order is set aside. The appeal is allowed with consequential reliefs, if any. 28.11 Further, the view on non-taxability on residential complex constructed for personal use is not restricted for the Government or Semi Government organizations. As per the definition of "personal use", even if the service receiver is a private company or industry who constructs staff quarters for residential purpose for i....
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....and Construction and after such construction, the ultimate owner receives such property for 'Personal use', then such activity would not be subjected to Service Tax, because this case would fall under the 'Exclusion Clause' provided in the definition of 'Residential Complex'. 20. However, in such a situation, if the Service of any person like the Contractor or a similar Service Provider (M/s. Larsen & Toubro Limited in the present case) is received, then such a person (M/s. L & T Limited, in the present case) would be liable to pay the Service Tax. 21. In view of this clear position of law indicated by the C.B.E. & C. itself, we are of the considered opinion that the Revenue cannot be allowed to argue against the legal position rightly explained by the C.B.E. & C. itself which can certainly be invoked and applied by this Court for interpreting the provisions of law on the principles of interpretation of Contemporenea Expositio and the Central Board of Excise and Customs or the highest Administrative body of the respondent Department itself has interpreted the provisions that the construction activities of this nature where Bi-parte or Tri-partite Agreements are en....
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....the respondent Assessee itself is held to be illegal, the question of availability of extended period of limitation for levying such Service Tax does not arise. 28.13 I would also like to further rely on the decision of Chennai Tribunal rendered in the case of Commissioner of Central Excise Vs Lanco Tanjore Power Company Limited [2018-TIOL-2138-CESTAT-MAD], where it was held by the bench as below- 7. Construction of residential complex activity was carried out by the assessee for M/s. Lanco. It is submitted that such residential units were constructed for use as quarters of the employees of M/s. Lanco. It is evident from the facts of the case that M/s.Lanco has engaged the assessee with the specific purpose of construction of such residential units which are meant for personal use of the employees of M/s. Lanco. We extract below the statutory definition of section 65(91a) of the Finance Act, 1994:- "residential complex" means any complex comprising of - (i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or services such as part, lift, parking space,....
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.... said service as per clause (b) of the said provision of law and stated that service tax would be chargeable only if it is for construction of new building or civil structure primarily for the purposes of commerce or industry. I have gone through the contents of the show cause notice, reply filed by the notice and the definition provided in the statue. I find that as the service provided by the noticee pertains to construction activity, the same can be examined under sub clause (b). Hence, applicability of service tax under this category depends on the nature of use of the constructed building or civil structure. If such constructed civil structure or building is used for providing services, primarily for commerce and industry then service tax would be chargeable. Thus, the essence of the definition is that the clause (b) is chargeable to service tax if it is used, occupied or engaged either wholly or primarily for the furtherance of commerce or industry. 29.2 While going through the breakup of the contracts provided by the noticee, it appears that the noticee has undertaken the construction activity on behalf of the various government agencies, where they have constructed....
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....ering certain consideration against the supply of water will be treated as commerce and the liability of payment of service tax against the assessee, was examined by Tribunal Bangalore in the case of Nagarjuna Construction Company Ltd. Vs. Commr of C. Ex. Hyderabad, - 2010 (19) S.T.R. 259 (Tri. - Bang.). Text of relevant finding is reproduced as under: "8.1 The GWSSB was found to be engaged in trading water which was a commercial activity. GWSSB was registered under the Industrial Dispute Act, 1947 and was engaged in an activity which came within the definition of 'industry' as per that Act. The relevant definition reads as follows : "'Industry' means- any systematic activity carried on by Co-operation between an employer and his workmen (whether such workmen are employed by such employer directly or by or through any agency, including a contractor) for the production, supply or distribution or goods or services with a view to satisfy human wants or wishes (not being wants or wishes which are merely spiritual or religious in nature), whether or not, (any capital has been invested for the purpose of carrying on such activity; or (if) such activity is carried on wit....
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.... would constitute 'industry'. However, production of drinking water to the community in Gram Panchayats and Nagar Panchayats in the State on recovery of user charges at a highly subsidized rate, we find, does not come within the expression 'industry' used in the definition of the taxable entry in question. From the figures of revenue of the Board for the year 2005-06, we find that above 90% of its revenue came from sale of water to local bodies rural population. The revenue was less than 1/3rd of the cost incurred to maintain water supply by the Board. The Board is run by substantial amounts released by the State Government as grant every year. These facts show that the pipelines in question were not laid to facilitate any commercial or industrial activity. 29.6 A similar view has been taken by Ahmedabad Tribunal in case of M/s. Dinesh Chandra Agarwal Infracon Pvt. Ltd. Vs. Commr of C.Ex., Ahmedabad-2011(21)S.T.R.41(Tri.- Ahmd.), where in the appellant was engaged in Laying of pipeline for supply of water for Gujarat Water Supply and Sewerage Board and Hon'ble Tribunal held asunder: 12. Examining the above issue, we refer to Gujarat Act No. 18 of 1979, under w....
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....nctions, which are being performed by the Gujarat Public Health Engineering Service, as may be specified, from time to time; (o) to perform and discharge such other duties and functions as are allotted to the Board under other provisions of this Act or as may be entrusted to it by the State Government." The perusal of the above duties and functions of the Board clearly show that sale of water is not the primary function of the Board. It is also clear that the water purchased by the Board is being distributed to rural and urban areas for the purpose of irrigation and drinking at different rates which are subsidized and even the operating cost also does not stand recovered by them. To setup an establishment for water supply is a part of the duties and functions of the State to provide its citizens with a better living. In these circumstances, it cannot be held that laying of pipelines for the Board is for the purpose of undertaking any commercial activities by the Board, and the appellant would be covered by said services by making him liable to payment of service tax." 29.7 While dealing with the departmental appeal filed in the case of 'Commissioner o....
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....)], it is clear that laying of pipelines/conduits for transmission of water or for disposal of sewerage falls within the ambit of CICS and not ECIS; and where provided to Government/Government undertakings and for supply of water for irrigation or consumption or for disposal of sewerage, the activity is non-commercial, non-industrial, is covered by the exclusionary clause in the definition of CICS and is not exigible to Service Tax. Since a turnkey/EPC contract would inhere elements of several services, consisting of combination of different services, the service which gives such contract its essential character would be laying of pipelines or conduits. A turnkey/EPC contract for laying of pipeline/conduit should therefore, logically be classified under clause (b), Explanation (ii) of Section 65(105)(zzzza), on and from 1-6-2007 as well. This is the consequence of applying Section 65A(2)(b) of the Act and this position is clarified in Board Circular No. 123/5/2010-TRU, dated 24-5-2010 [considered in detail in sub-para (o) infra]." 29.9 The issue about taxability under works contract service for the construction of various structures for the government including hostels was....
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....ppellant for the demand of service tax in the case of buildings constructed for C-DAC, NFC and APHMHIDC, and it has to be held that these buildings constructed by the appellant and the services rendered under works contract services are not taxable pre or post 1-72012. 11. As regards the service tax liability on the buildings constructed for ICFAI, we find that the issue is no more res integra as the Tribunal in the case of Vij Construction Pvt. Ltd. v. CCE, New Delhi [2018 (11) G.S.T.L. 169 (Tri. - Del.)] was considering the very same issue of taxability of the services for construction of buildings for ICFAI and in paragraph No. 6 has held that in regard to campus for ICFAI University Dehradun, the buildings are for use of a recognised university for education and the same cannot be considered as commercial buildings. ICFAI University is having pan India presence, operating in various campuses, it has to be considered as an educational institution, as per the ratio of the decision of the Tribunal in the case of Vij Construction Pvt. Ltd. (supra). Accordingly, the service tax liability on the construction of buildings for ICFAI Bangalore, Jaipur and Hyderabad for the peri....
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....all under the category of taxable services, as the same is not used for commercial and industry but it is used for providing education. Therefore service tax paid by the respondent is liable to be refunded." 29.12 I further find the support from the decision of Hon'ble High Court of Rajasthan in case of 'Commissioner of Central excise, Jaipur Vs Jatan Construction Pvt. Ltd' (2019(24) GSTL 552 Raj), where the court held while dismissing the appeal filed by the revenue- "5. However, in our considered opinion, the Tribunal clearly observed as under : "7. Admittedly, in the present case the construction activity of the appellant is with reference to student's hostel and the public hospital. These are non-commercial buildings. Accordingly, these are excluded from tax liability under works contract service." 6. It is thus clear that the hostel which was constructed was a girls hostel and hospital which was need of the Jaipur was constructed. In that view of the matter, it was not commercial building as per the language used and the activities neither fall under commercial activities nor industrial activities, it is purely a social activ....
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....ther 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 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 Service Tax". From the above circular, we find that appellant are not liable to pay Service Tax. Accordingly, we set aside the impugned order and allow the appeal with consequential relief if any." 29.15 The above view was reaffirmed by the Tribunal in the party's further appeal (2015-TIOL-1 145-CESTAT-MUM) ....
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....ciation is an official representative of Rifle Sports, which are duly recognized by the Ministry of Youth Affairs and Sports and affiliated to Indian Olympic Association. They are engaged in recognized sports activities and their headquarter is situated in the said building. We are of the considered view that the building cannot be considered as commercial building for service tax purposes. 6. With reference to building in the campus of ICFAI University, Dehardun, it is clear that the said building is for use by a recognized university for education. The same also cannot be considered as commercial building. We note that the impugned original order proceeded to hold these as commercial building only on the basis of fees collected for the activities or participation in Rifle Association as well as by the university. We note that collection of fees for promoting or allowing the person to use the facility by these bodies will not make the building commercial. Considering the nature of occupants' activities carried out in the building, we are of the view that both these activities cannot be considered as resulting in construction of commercial building. Accordingly, we set asi....
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....s not attract the levy of the service tax as further part of the definition would indicate. The said construction, in order to attract service tax, will also have to satisfy the conditions laid down by subsequent part of the definition i.e. i) used, or to be used, primarily for; or ii) occupied, or to be occupied, primarily with; or iii) engaged, or to be engaged, primarily in, commerce or industry, or work intended for commerce or industry..... (emphasis supplied by us) 16. The language employed in the definition clause is clear and unambiguous. The plain meaning as can be understood from the definition clause, more particularly, the clarification contained in clauses (i), (i), (ii) is that the construction ipso facto is not leviable to service tax, but it is only when it is used, or to be used, primarily for "commerce" or "industry" or work intended for "commerce" or "industry" that service tax can be levied. Thus, it is only that construction which is to be used or primarily to be used for commerce that is subject to levy of service tax. 17. In the present facts, we find that dominant user of the sports complex is non-commerc....
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.... (commercial and industrial buildings or civil structures) 13.1 Services provided by a commercial concern in relation to construction, repairs, alteration or restoration of such buildings, civil structures or parts thereof which are used, occupied or engaged for the purposes of commerce and industry are covered under this new levy. In this case the service is essentially provided to a person who gets such constructions etc. done, by a building or civil contractor. Estate builders who construct buildings/ civil structures for themselves (for their own use, renting it out or for selling it subsequently) are not taxable service providers. However, if such real estate owners hire contractor/ contractors, the payment made to such contractor would be subjected to service tax under this head. 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"" f....
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....s GETCO and APMC are only indicative and not conclusive. Quite obviously, there may be more such cases. The same could be unearthed only through a detailed scrutiny of the contracts and other documents, as the break up provided by the noticee is insufficient to identify the leviability of service tax. From the scant information provided in the said break up, it would be difficult to clearly distinguish the projects which are developed as a revenue generating measure by the service recipient and entails service tax liability." 4.4 As regards the correct classification of the service in their appeal, the Revenue has made a general statement vis-a-vis non-classification/ incorrect classification of the service; we do not find any merit in their observation. Further, we find that except for service provided by the Respondent to APMC and GETCO, all other services have been correctly and appropriately classified by the Adjudicating Authority in the impugned order and benefit of exemption as admissible has been allowed. 4.5 In respect of service provided to GETCO, we find that service provided are in relation to transmission and distribution of electricity. These services are exempt....
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.... law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. An exception and/or an exempting provision in a taxing statute should be construed strictly and it is not open to the Court to ignore the conditions prescribed in the relevant policy and the exemption notifications issued in that regard. 8.2 The exemption notification should be strictly construed and given a meaning according to legislative intendment. The Statutory provisions providing for exemption have to be interpreted in light of the words employed in them and there cannot be any addition or subtraction from the statutory provisions. 8.3 As per the law laid down by this Court in a catena of decisions, in a taxing statute, it is the plain language of the provision that has to be preferred, where language is plain and is capable of determining a defined meaning. Strict interpretation of the provision is to be accorded to each case on hand. Purposive interpretation can be given only when there is an ambiguity in the statutory provision or it results in absurdity, which is so ....
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.... to provide shop/land/platform on rent/lease. If the statute mandates that the Market Committees have to provide the land/shop/platform/space on rent/lease then and then only it can be said to be a mandatory statutory obligation otherwise it is only a discretionary function under the statute. If it is discretionary function, then, it cannot be said to be a mandatory statutory obligation/statutory activity. Hence, no exemption to pay service tax can be claimed. 10. The next provision relied upon by the appellants - respective Market Committees is Rule 45 of the Rajasthan Agricultural Produce Markets Rules, 1963 (hereinafter referred to as "Rules, 1963"), which reads as under :- "45. The Market Committee fund. - All money received by the Market Committee shall be credited to the fund called the Market Committee fund. Except where Government on application by the Market Committee or otherwise shall direct, all money paid into the Market Committee fund shall be credited at least once a week in full into Government treasury or sub-treasury, or a bank duly approved for this purpose by the Director. All balance from the fund shall be kept in such treasury or sub-treasury....
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....latform as such cannot be said to be service. However, their only submission is that the Market Committees are exempted from levy of service tax on such service/activity as provided under the 2006 circular, which as observed hereinabove has no substance. Hon'ble Supreme Court reaffirmed this decision in case of,- ➢ Agriculture Produce Marketing Committee Gazipur [(2023) 2 Centax 293 (S.C.)] ➢ Gujarat Industrial Development Corporation [2023 (73) G.S.T.L. 452 (S.C.)] In the present case we are concerned with the period prior to 01.07.2012. From the perusal of the above decision of the Hon'ble Supreme Court, it is clear that activities undertaken by the APMC/ Krishi Upaj Mandi Samiti are subjected to service tax as they are commercial in nature. The service provided by the respondent, in such case towards construction of shop/ land/ platform/ space which are used by the recipient of service for the purpose of commerce or industry will be subjected to service tax. In view of this settled legal position, we find the services provided by the respondent to APMC will be subjected service tax under the appropriate category of taxable services. 4.7 T....
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....ing taxable services to their service recipients and also contravened the various provisions of Chapter V of the Act and the rules made thereunder, as mentioned supra, with an intent to evade payment of service tax levied thereon. 13. WHEREAS it appears that M/s Paresh S. Patel have received payment of an amount of Rs. 6,05,16,599/- during the year 2008-09 Rs. 6,97,37,388/-during the year 2009-10 Rs. 4,43,51,657/- during the year 2010-11 and Rs. 6,62,50,707/- during the year 2011-12 from the respective service receivers for providing them the taxable service of construction of complex, other constructions and taxable service of execution of works contract against the work order awarded to them, and have incurred transport expenses of Rs. 1,98,20,730/- during the year 2008-09 to 2011-12 for receipt of goods and materials but they have not paid the service tax levied thereon by suppressing the facts and contravening the various provisions of Chapter V of the Act and the rules made thereunder with an intent to evade payment of service tax." 4.8 Thus, in respect of the demand made on services provided to APMC, we are of the view that Revenue should succeed both on the groun....