2018 (3) TMI 354 - AT - Service Tax

Commercial or Industrial Construction Services - service provided to Agriculture Produce Market Committee, Ahmednagar - Held that - issue has been squarely decided in the case of M/s. A.B. Projects Pvt. Ltd. Versus Commissioner of Central Excise, Nagpur 2017 (8) TMI 518 - CESTAT MUMBAI , where it was held following the CBEC Circular, we can reach to the conclusion that the activities of APMC in respect of these contracts are not commercial in nature. Thus these contracts are not covered under the purview of commercial and industrial construction service - appeal allowed - decided in favor of appellant.

Summary

Issues:
Confirmation of demand and imposition of penalty for Commercial or Industrial Construction Services provided to Agriculture Produce Market Committee, Ahmednagar.

Analysis:
The appeal was filed against the demand and penalty imposed on Commercial or Industrial Construction Services provided to the Agriculture Produce Market Committee, Ahmednagar. The appellant argued that the issue was previously decided in the case of A.B. Projects Pvt. Ltd. vs. Commissioner of Central Excise, Nagpur. The Tribunal examined the submissions and referred to the decision in the aforementioned case, which highlighted that APMCs provide basic facilities using market fees collected from licensees for the benefit of farmers, purchasers, and others. The Circulars No.157/8/2012-S.T. and No.80/10/2004-S.T. clarified that services provided by APMCs are classified as Business Auxiliary Services (BAS) and are exempt from taxation under specific notifications. The Tribunal concluded that the activities of APMC were not commercial in nature, and therefore, the contracts were not covered under commercial and industrial construction services, leading to the allowance of the appeal.

This judgment emphasizes the importance of understanding the nature of services provided by entities like APMCs and the applicability of tax exemptions based on the purpose and scope of their activities. The decision provides clarity on the classification of services under relevant tax regulations and highlights the significance of legal precedents in determining tax liabilities. The reference to specific circulars and notifications adds a layer of legal interpretation to the analysis, ensuring a comprehensive understanding of the tax treatment of services provided by entities involved in charitable or non-commercial activities.