2021 (9) TMI 1176 - AT - Service Tax

Short payment of service tax - amount received towards construction of Educational Institutions - period from 01.04.2012 to 30.06.2012 - HELD THAT - It needs to noted that for the period prior to April 2012, show cause notices were issued to the respondent on the same ground namely that construction for Educational Institutions would be taxable under CICS but the demand raised in the show cause notices were dropped. The Department filed appeals before the Tribunal which appeals were dismissed by the order dated 12.09.2018. When the contention advanced by the Department in the appeal decided on 12.09.2018 has not been accepted and that order has attained finality, the present appeal filed by the Department deserves to be dismissed - Decided against Revenue.

Summary

Issues:
1. Appeal against dropping of demand for short payment of service tax on construction of Educational Institutions.
2. Interpretation of the definition of 'commercial or industrial construction service' under the Finance Act.
3. Challenge to the order based on lack of evidence regarding the usage of the constructed buildings.

Analysis:
1. The Department appealed against the dropping of the demand for short payment of service tax on construction of Educational Institutions. The respondent, a construction company, argued that such activities did not fall under the definition of 'commercial or industrial construction service' (CICS) as per the Finance Act. The show cause notice was issued in 2014, proposing to demand service tax for the period from April 2012 to June 2012. The adjudicating authority dropped the demand, stating that construction for Educational Institutions did not qualify as CICS.

2. The Department raised several grounds in the appeal, including the contention that construction for Educational Institutions should be considered commercial and taxable. However, the Tribunal analyzed the definition of CICS and emphasized the relevance of the building's usage in determining taxability. Referring to a CBEC Circular, the Tribunal noted that the tax liability depends on whether the building is used for commerce or industry. The Tribunal upheld the Commissioner's finding that the buildings in question were used for educational purposes, and the Department failed to provide evidence to the contrary.

3. The Tribunal highlighted that previous appeals by the Department on similar grounds had been dismissed, and the order had attained finality. The respondent's representatives confirmed the finality of the previous order, which the Department did not refute. Therefore, the Tribunal concluded that since the Department's contentions had been previously rejected and the earlier order had been finalized, the present appeal deserved to be dismissed. As a result, the Department's appeal was dismissed on 23.09.2021.