2017 (10) TMI 439 - AT - Service Tax

Commercial or Industrial Construction service - charitable organization - taxability - case of appellant is that APMC is charitable trust therefore service provided to charitable trust is not for commercial purpose hence the same is not taxable - Held that - adjudicating authority has not utterred a word as regard the above submission, therefore matter needs to be re-considered by the adjudicating authority particularly on the above submission made by the appellant before the adjudicating authority also before this Tribunal - appeal allowed by way of remand.

Summary

Issues:
Classification of service as Commercial or Industrial Construction under Section 65(25B) of the Finance Act, 1994 for service tax liability.

Analysis:
The case involved the appellant providing Commercial or Industrial Construction Services to a market development project. The show cause notice contended that the service fell under the taxable category, leading to a demand for service tax, interest, and penalties. The appellant argued that since the construction was for an Agricultural Produce Market Committee (APMC), which was considered a charitable organization, the service provided should not be classified as commercial or industrial construction and hence not taxable. The appellant relied on judgments and circulars to support their contention that services provided to charitable organizations are not taxable under certain circumstances. The Revenue, on the other hand, emphasized that the construction was used for trading activities of agriculture produce, making it a commercial purpose and thus taxable under the definition of Commercial or Industrial Construction service.

The Tribunal noted the arguments presented by both sides and observed that the appellant strongly contended that the APMC was a charitable trust, making the service provided non-taxable. However, the adjudicating authority did not address this specific argument in the impugned order. Therefore, the Tribunal set aside the order and remanded the matter back to the adjudicating authority for a fresh consideration, particularly focusing on the appellant's submission regarding the charitable nature of the organization. The Tribunal emphasized that all issues were kept open for further consideration, and the appeal was allowed by way of remand to the adjudicating authority.

In conclusion, the judgment highlighted the importance of properly addressing all arguments raised by the parties involved in the case. It emphasized the need for a thorough examination of whether services provided to charitable organizations should be considered taxable under the relevant provisions of the law. The case underscored the significance of ensuring a comprehensive analysis of all aspects before reaching a final decision on the tax liability of services provided in such contexts.