2011 (9) TMI 122 - AT - Service Tax

Commercial and industrial construction services - Held that - The activity of construction of sports complex/stadium cannot be termed as commercial and industrial construction. - on the activity of construction of shops the appellants are liable to pay service tax therefore re-quantification of demand of service tax is required - matter remanded back for re-quantification.

Summary

Issues:
- Appeal against service tax demand on construction activities for a stadium and shopping complex.
- Interpretation of liability for service tax on different parts of the construction contract.

Analysis:
The appellants appealed against the demand of service tax on their construction activities for a stadium and a shopping complex. The revenue asserted that service tax was applicable to the entire construction project. However, the Tribunal examined the tender notice and determined that the construction of the stadium for sports purposes did not fall under commercial and industrial construction services subject to service tax. On the other hand, the construction of the shopping complex was deemed liable for service tax. The Tribunal directed the appellants to pre-deposit a specific amount for the shopping complex construction within a specified timeframe. The matter was remanded to the adjudicating authority for re-quantification of the service tax demand specifically related to the construction of the shopping complex. The Commissioner was tasked with determining any penalty while quantifying the service tax liability for the shopping complex construction.

In conclusion, the Tribunal disposed of the appeal and stay application by ruling that the appellants were not liable to pay service tax for the construction of the stadium meant for sports purposes. However, they were directed to pay service tax for the construction of the shopping complex. The matter was sent back to the adjudicating authority for re-quantification of the service tax demand related to the shopping complex construction, with instructions for penalty determination by the Commissioner.