2018 (5) TMI 828 - AT - Service Tax

Classification of services - the construction of wall and watch tower around the sports complex were created for security purpose of others as well as players - whether classifiable under the category of Commercial or Industrial Construction Services ? - Held that - the identical issue has come up before the Tribunal in the case of B.G. Shirke Construction Technology Pvt. Ltd. V/s CCE Pune-III 2013 (11) TMI 870 - CESTAT MUMBAI where it was observed that stadium is facility for recreation of public and not covered under the impugned category. Merely because some amount was charged stadium cannot be considered into Commercial or Industrial Construction - appeal allowed - decided in favor of appellant.

Summary

Issues: Classification of construction services for a sports complex.

Analysis:
The appeal was filed against an Order-in-Appeal regarding the classification of construction services provided for a sports complex in New Delhi. The appellants were contracted by DDA to construct a security wall and watchtower in Siri Fort Complex for the Commonwealth Games. The Department classified the construction under "Commercial or Industrial Construction Services," leading to a service tax demand. The Tribunal referred to a similar case where it was held that a stadium is a public facility for recreation and not commercial or industrial construction merely because user charges are levied. The Tribunal cited legal definitions of public utility and public facility to support its decision. It concluded that the sports stadium constructed for the Commonwealth Games was a non-commercial construction, exempting it from service tax. The appeal was allowed based on the Tribunal's earlier order, setting aside the impugned order.

In conclusion, the Tribunal held that the construction of the sports complex for the Commonwealth Games was not liable for service tax under the category of "Commercial or Industrial Construction Service." The decision was based on the understanding that the sports stadium served a public purpose and was not intended for commercial or industrial use, despite user charges being levied for its utilization. The legal definitions of public utility and public facility were instrumental in determining the nature of the construction, leading to the allowance of the appeal and the setting aside of the initial order-in-appeal.