N J Devani Builders Pvt Ltd VERSUS C.S.T.-Service Tax – Ahmedabad

SERVICE TAX APPEAL NO. 10525 of 2013

SERVICE TAX Miscellaneous (ORS) Application No. 10415 of 2022

[Arising out of Order-in-Original/Appeal No 7-2013-STC-SKS-COMMR-A-AHD dated

17.01.2013 passed by Commissioner of Service Tax-AHMEDABAD]

 

N J Devani Builders Pvt Ltd

VERSUS

C.S.T.-Service Tax – Ahmedabad

 

APPEARANCE:

Shri Amal Dave, Advocate appeared for the Appellant

Shri Prakash Kumar Singh, Superintendent (AR) for the Respondent

CORAM: HON’BLE MEMBER (JUDICIAL), MR. RAMESH NAIR

HON’BLE MEMBER (TECHNICAL), MR. RAJU

FINAL ORDER NO. A/10262 / 2023

DATE OF HEARING: 23.01.2023

DATE OF DECISION: 07.02.2023

RAMESH NAIR

In the present case following issues are involved:

(A) Whether in the facts and circumstance of this case appellant service

falls under commercial construction provided in respect of

construction of a building belongs to university.

(B) Whether in the facts and circumstances of this case the demand of

Rs. 52,228/- under the category of commercial or Industrial

construction services related to supply or furniture is justified or

otherwise.

(C) Whether the work of strengthening of culverts on the road is liable to

Service Tax under commercial or Industrial construction service.

(D) Whether the demand for extended period is invokable.

Shri Amal Dave, Learned Counsel appearing on behalf of the

appellant submits that the construction of a building is in respect of

educational university which is under a trust. Therefore, the same cannot

be treated as commercial building and cannot be taxed under commercial

construction service. He alternatively, by way of miscellaneous application

submits that the construction was provided along with material and state

tax i.e VAT was paid on such projects. Therefore, the service if at all taxable

is covered by “works contract Service”. Since the period involved is 2005-

06 and 2006-07. The “works contract service” is not taxable till

01.06.2007. In this regard he referred to the contract between the

appellant and GERMI (service recipient). He placed reliance upon the

following judgments:

 Commr. Of Service Tax-Vll Vs. M/s. S.M. Sai Construction-2016 (42)

STR 716 (Tri.-Mumbai)

 M/s. Vij Construciton Pvt. Ltd. V/s. Commr. Of Central Ex., New

Delhi- 2018 (11) GSTL 169 (Tri.- Delhi)

 M/s. KMV Projects Ltd.- V/s. Commr. Of Ce. Ex. & St, Hyderabad.-

2019 (27) GSTL 388 (Tri.- Hyderabad)

 M/s. Lanco Infratech Ltd. V/s. CC, EC & ST, Hyderabad.- 2015 (38)

STR 709 (Tri.- LB)

Shri Prakash Kumar Singh, Learned Superintendent (Authorized

Representative) appearing on behalf of the revenue reiterates the finding

of the impugned order.

We have carefully considered the submissions made by both the

sides and perused the records. We find that as regard the service tax

demand on construction service to GERMI apart from the ground that the

same is not commercial construction being an education trust, the

appellant also made an additional ground by way of miscellaneous

application that the entire service falls under works contract service.

However, this ground was taken first time before this Tribunal. Therefore,

the lower authorities had no occasion to deal with this issue. In this

position, we are of the view that the issue in respect of construction of

GERMI… needs to be re considered from the angle of work contract service.

As regard the issue of service tax on supply of furniture, we find that the

Lower Authority have held the said activity as commercial construction and

demanded tax accordingly. We are of the view that mere supply of

readymade furniture cannot be classified as commercial construction

service supply of furniture is nothing but sale of furniture. Hence the same

cannot be classified as taxable services. Accordingly the service tax

demand of Rs.52,228/- is not sustainable and the same is set aside. As

regard the issue relates to demand of Service tax of Rs. 34,483/- on the

activity of strengthening of culverts on roads, we find that this service is

directly connected to the road and any work related to the public road is

excluded from the service of commercial or industrial construction. For this

reason the same cannot be taxed under commercial or industrial

construction service. Hence, We set aside the demand of Rs. 34,483/-

As per our above discussion and finding appeal relates to demand ot Rs.

52,228/- of supply on furniture and Rs. 34,483/- relates to strengthening

of culverts on road is allowed. Appeal relates to the issue of construction

of building for GERMI is allowed by way of remand to the Adjudicating

Authority for passing a fresh order on all the issues.

The appeal is partly allowed and partly remanded in the above

terms. MA also stands disposed of.

(Pronounced in the open Court on 07.02.2023)

(RAMESH NAIR)

MEMBER (JUDICIAL)

(RAJU)

MEMBER (TECHNICAL)