2017 (7) TMI 197 - AT - Service Tax

Completion and finishing activity - benefit of N/N. 1/2006-ST dt. 1.3.2006 - activity of laying of synthetic/wooden flooring in various sports stadium - Whether the benefit of CENVAT Credit can be extended to the appellant in case they are denied the benefit of N/N. 1/2006-ST.? - Held that - In the event that the benefit of notification No. 1/2006-ST is denied the appellants would be clearly entitled to the cenvat credit irrespective of the fact that they have not claim it earlier while claiming benefit of Notification No. 1/2006-ST. The demand confirmed on this is therefore set aside and matter remanded to the original adjudicating authority to examine the detail account submitted by the appellant - matter on remand. Whether appellant are liable to service tax in respect of services provided to Shri Sathya Sai Health and Education Trust, Government of Maharashtra in respect of Balewadi Stadium for Commonwealth Youth Games and Delhi Development Authority? - Held that - Tribunal in the case of Anand Construction Co. 2013 (3) TMI 250 - CESTAT MUMBAI relying on the Circular No. 80/10/2004-ST dt. 17.9.2004 held that no tax can be demanded under the head of commercial or industrial construction in respect of services provided for construction of sports complex for Government of India and for charitable institution - appeal allowed. Appeal allowed in part and part matter on remand.

Summary

Issues involved:
1. Benefit of Cenvat Credit denial and imposition of penalty by lower authorities.
2. Demand of service tax for completion and finishing services provided to various entities.

Analysis:

Issue 1: Benefit of Cenvat Credit denial and penalty imposition
The appellant, engaged in providing Commercial or Industrial Construction Services and Business Auxiliary Service, appealed against the demand confirmation and penalty imposition by lower authorities. The first issue raised was regarding the denial of service tax benefit under Notification No.1/2006-ST for completion and finishing services. The Revenue alleged that the appellants were not entitled to this benefit as they were only providing completion and finishing services, not covered under the notification. The appellant argued that if denied this benefit, they should be allowed Cenvat Credit for the materials used. The Commissioner denied this credit citing trading activities and lack of separate accounts. However, the appellant presented detailed accounts to the Tribunal, demonstrating maintenance of stock registers and bill reconciliations. The Tribunal set aside the demand, remanding the matter to the original authority for a detailed examination of the Cenvat Credit availability.

Issue 2: Demand of service tax for completion and finishing services
The second issue pertained to the demand of service tax for services provided to various entities like the Government of Maharashtra, Delhi Development Authority, and Shri Sathya Sai Health & Education Trust. The appellant argued that the services provided for non-commercial purposes, such as sports stadium construction, should not be taxed under Commercial or Industrial Construction Service. They relied on circulars and tribunal decisions to support their stance. The CBEC clarified that tax liability depends on whether the construction is used for commerce or industry, exempting constructions for non-profit purposes. The Tribunal, citing previous judgments, held that services provided for public benefit, like sports complexes, are non-commercial constructions and exempt from service tax. Consequently, the demand of service tax for services provided to the mentioned entities was set aside.

In conclusion, the appeal was partly allowed and partly remanded to the original adjudicating authority for further examination.