2018 (4) TMI 598 - AT - Service Tax

Commercial and Industrial Construction Service - construction of two buildings, one for National Rifle Association of India and another one for ICFAI University, Dehradun - Original Authority held that these buildings are commercial in nature, and liable to tax - whether the two buildings are commercial in nature? - Held that - Regarding the Headquarter building of National Rifle Association of India, we find that the said association is an official representative of Rifle Sports, which are duly recognized by the Ministry of Youth Affairs and Sports and affiliated to Indian Olympic Association - the building cannot be considered as commercial building for service tax purposes. Building in the campus of ICFAI University, Dehardun - Held that - the said building is for use by a recognized university for education. The same also cannot be considered as commercial building - collection of fees for promoting or allowing the person to use the facility by these bodies will not make the building commercial. Demand set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
Service tax liability under "Commercial and Industrial Construction Service" for constructing buildings for National Rifle Association of India and ICFAI University, Dehradun.

Analysis:
The appellant was held liable for service tax under "Commercial and Industrial Construction Service" for constructing buildings for National Rifle Association of India and ICFAI University, Dehradun. The Original Authority confirmed the tax liability along with penalties, considering the buildings as commercial in nature. The appellant argued that the National Rifle Association of India is an official body for Shooting Sports in India, recognized by various sports bodies and the Ministry of Youth Welfare & Sports. They provided supporting documents to establish their non-commercial nature. Similarly, the appellant contended that ICFAI University, Delhi, is a recognized university under the UGC Act, providing educational courses, and thus, the construction for the university should not be taxed under the said service category.

Upon reviewing the case, the Tribunal found that the National Rifle Association of India is an official representative of Rifle Sports, recognized by the Ministry of Youth Affairs and Sports and affiliated with the Indian Olympic Association. The association's headquarter building was deemed non-commercial as it is used for recognized sports activities. Similarly, the building in the campus of ICFAI University, Dehradun, was considered non-commercial as it is used by a recognized educational institution. The Tribunal noted that the Original Authority based its decision on the fees collected by these bodies, which was deemed insufficient to classify the buildings as commercial. The Tribunal concluded that the nature of activities carried out in the buildings did not warrant them being considered commercial, leading to the setting aside of the original order and allowing the appeal of the appellant.