M/S. Anand Construction Company vs Commissioner Of Central Excise, ...

(Arising out of Order-in-Appeal No. PII/AV/102/2010 dt. 22.07.2010 passed by the Commissioner of Central Excise (Appeals) Pune-II )

For approval and signature:

Honble Mr. M.V. Ravindran, Member (Judicial) Honble Mr. P.S.Pruthi, Member (Technical)

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1. Whether Press Reporters may be allowed to see : the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : of the Order?

4. Whether Order is to be circulated to the Departmental : authorities?

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M/s. Anand Construction Company : Appellant

VS

Commissioner of Central Excise, Kolhapur : Respondent

Appearance

Shri A.V. Naik, Advocate, for Appellant

Shri A.B. Kulgod, Assistant Commissioner (A.R) for respondent

CORAM:

Mr. M.V. Ravindran, Member (Judicial) Mr. P.S.Pruthi, Member (Technical)

Date of hearing : 15/4/2015 Date of decision : 15/4/2015

ORDER NO.

Per : M.V. Ravindran

This appeal is directed against Order-in-Appeal No. PII/AV/102/2010 dt. 22.07.2010.

2. Heard both sides and perused the records.

3. On consideration of the submissions made by both sides, we find that the issue involved in this case is regarding the rejection of the refund claim which has been filed by the appellant under the category of Commercial or Industrial Construction Services, under bona fide impression that they are covered under the works contract services. After recording that they are not covered under any of the taxable category as the construction undertaken by them was in respect of hostel for the medical institute, they filed refund claim. On receipt of such refund claim, lower authorities have issued two show cause notices for the period April 2008 to September 2008 demanded service tax along with interest. On the premise that the appellant has not produced any evidence with regard to the building constructed by them is not to be used for commercial or industrial purpose. The said show cause notice culminated in an appeal before the Tribunal in Appeal No. ST/194//2012-Mum. The Tribunal vide final order No.A/690/2012-WZB/C-I (CSTB) dt. 26.9.2012, at the time of disposing of the stay petition, the appeal was disposed in favour of the assessee appellant herein. This judgment is reported at 2013 (32) STR 451 (Tri. Mumbai). We find that the dispute as to the refund claim filed by the appellant has been disposed of by the impugned order in this appeal holding that the appellant is not eligible for the refund as he has correctly paid the tax. We find that the impugned order is incorrect as this Bench vide final Order dt. 26.9.2012 held as under:

Considering the fact that building is constructed as hostel for the residence of students studying in medical institute and there is no allegation that the building is being used for any other purpose. In fat set of facts, the Board Circular No. 80/10/2004-S.T., dated 10.9.2004 is applicable to the facts of this case which clarified as under:

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 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.

4. In our considered view, as the Bench has already held in favour of the appellant herein that the construction of hostel would not fall under the category of taxable services. The impugned order which rejects the appeal of the appellant for the refund of the amount of service tax incorrectly paid, is liable to be set aside and we do so.

5. The impugned order is set aside and the appeal is allowed with consequential relief.

(Pronounced in court)

(P.S.Pruthi) Member (Technical)

(M.V. Ravindran) Member (Judicial)

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