2013 (10) TMI 532 - AT - Service Tax

Commercial and industrial construction service - Held that - applicant had constructed platform in the open place for platforms of Agricultural Product Market Committee. The platforms are used to facilitate the sale of cotton by the farmers. In these circumstances, prima facie we find that the applicant has made out a strong case in their favour - stay granted.

Summary

Issues:
Application for waiver of pre-deposit of Service Tax, interest, and penalty based on the nature of construction activity undertaken.

Analysis:
The applicant filed an application seeking waiver of pre-deposit of Service Tax, interest, and penalty amounting to Rs.99,27,387/-, contending that the construction of platforms for the Agricultural Produce Market Committee did not fall under commercial or industrial construction service. The applicant argued that the construction was for facilitating the sale and purchase of agricultural produce, specifically cotton, and therefore should be considered non-commercial in nature, relying on a Board Circular clarifying non-taxability of constructions for specific purposes. The Tribunal acknowledged that the platforms were indeed constructed in an open place for facilitating the sale of cotton by farmers, which prima facie indicated a non-commercial purpose. Consequently, the Tribunal found merit in the applicant's case and waived the pre-deposit of the service tax, interest, and penalty, staying the recovery during the appeal's pendency.

The Revenue, on the other hand, supported the lower authority's findings and contended that the construction activity fell under the definition of Commercial and Industrial Construction service as per section 65 of the Finance Act. The Revenue argued that since the platforms were constructed for facilitating commerce or industry, they should be considered commercial or industrial construction services. However, the Tribunal noted the specific context of the construction of platforms for the Agricultural Produce Market Committee, emphasizing their use in facilitating the sale of cotton by farmers. This led the Tribunal to conclude that the applicant had a strong case in their favor, ultimately granting the waiver of pre-deposit and staying the recovery of the tax, interest, and penalty during the appeal process.

In summary, the judgment focused on the nature and purpose of the construction activity undertaken by the applicant, specifically examining whether the construction of platforms for the Agricultural Produce Market Committee constituted commercial or industrial construction services. By considering the specific context and purpose of the construction in facilitating the sale of agricultural produce, the Tribunal found in favor of the applicant, granting the waiver of pre-deposit and staying the recovery of the tax, interest, and penalty.