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TMI Blog2018 (5) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... edly provided for construction of building in the SEZ. Therefore, the said service is exempted - demand set aside. Whether the GTA service availed in connection with the construction of hospital is liable to service tax? - time limitation - Held that: - In the present case, the GTA service is used by the appellant and the appellant is the deemed service provider. Hence the GTA service is integral to construction of hospital building. Therefore, the GTA service relating to construction of hospital is taxable in the hands of the appellant - the appellant have not disclosed the transaction of GTA to the department as no ST-3 returns were filed declaring the value of GTA service to the department. Therefore, extended period in respect of show cause notice dated 31/12/2012 is rightly invoked - As regard the show cause notice dated 14/10/2013 we agree with the submissions of Learned Counsel that once the department came to know about the activity of the appellant and a show cause notice was issued then in the subsequent show cause notice invocation of extended period is not available to the department - demand relating to show cause notice dated 14/10/2013 for the extended period i.e. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne is exempt. Therefore, GTA service which undisputedly provided for construction of building for Tata Consultancy Services in the special economic zone shall be exempt under clause (e) of Section 26(1) of SEZ Act, 2005. He further submits that, in any event, on the tax payable, the appellant is entitled for CENVAT credit even though the service provided is in SEZ is not liable to service tax but the input used are eligible for CENVAT credit under CENVAT Credit Rules 2004. In this context he refers to Rule 6(c) of CENVAT Credit Rules, 2004. Therefore, the exercise is revenue neutral and he place reliance on the following judgments. i. Jet Airways Ltd v. Commissioner of Service Tax, Mumbai 2016 (44) STR 465 (Tri.-Mumbai) ii. Commissioner of Central Excise, Pune v. Coca-Cola India Pvt Ltd 2007 (213) ELT 490 (SC) iii. Commissioner of Central Excise Customs, Vadodara II v. Indeos ABS Ltd 2010 (254) ELT 628 (Guj.) 4. As regard the third issue, demand on GTA availed in construction of hospital, Deenanath Mangeshkar Hospital and Research Centre run by Lata Mangeshkar Medical Foundation, he submits that the show cause notice dated 31/12/2012 was issued for the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unts to suppression of facts. 9. We have heard both sides and carefully considered the submissions made by both the sides and perused the records. 10. As regard the issue whether the construction service in respect of the hospital is not for commercial or industrial construction, the hospital is run by the charitable organization and such activities are clarified by the Board in the circular dated 17/09/2004 (supra) wherein in paragraph 13.2, which reads as under. 13.2 The leviability of service tax would depend primarily upon whether the building or civil structure is used, or to be used for commerce or industry. The information about this has to be gathered from the approved plan of the building or civil construction. Such constructions which are for the use of organizations or institutions being established solely for educational, religious, charitable, health, sanitation or philanthropic purposes and not for the purposes of profit are not taxable, being non-commercial in nature. Generally, government buildings or civil constructions are used for residential, office purposes or for providing civic amenities. Thus, normally government constructions would not be taxab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns which are for the use of organization or institutions being established solely for educational, religious, charitable, etc. However, according to the first respondent, the exemption of service tax can be claimed only in respect of construction services provided to the institutions which should solely impart education without any profit and if the institutions are earning profits, they cannot be construed as non-commercial, but only as industries. In such case, the exemption Circular cannot be made applicable. In the present case, after following the decision of the Hon ble Apex Court in Bangalore Water Supply Sewerage Board v. R. Rajappa others reported in 1978 AIR 548 for the proposition of law that educational institution, viz., a university, a college, a school or research institute is, an industry and not charitable and also following other relevant decisions, the first respondent has categorically held as under in Paras 20 and 21 : 20. The above decisions of various judicial for a clearly points to the fact that the educational institutions per se cannot be held as non-commercial or non-profit industries. In this regard, I would like to emphasize on the fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t respondent, by relying upon the ratio laid down by the Apex Court in Bangalore Water Supply case, he came to the conclusion that the educational institution is an industry and the petitioner provided construction services to the educational institutions are making systematic profits and as such, they are commercial in nature and thereby the exemption under the said Circular, dated 17-9-2004 cannot be availed by the petitioner. Though the first respondent has categorically mentioned in para 20 that any claim on nonprofit and non-commercial nature of institutions has to be substantiated only by way of establishing the credentials of such institutions and not by merely stating that they are in the field of education , however, considering the fact that the petitioner failed to provide any such evidence, the first respondent came to the conclusion that the educational institutions to whom the petitioner provided construction services, are making systematic profits and their sole aim is not to serve the poor section of the public and accordingly he rejected the claim of the petitioner. 9. Admittedly, as on the date of passing the impugned proceedings, there was no evidence avail ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i)(b) of the Finance Act which defined, in my opinion, is fallacious and cannot be tenable. 10. In fact, the consistent version of the petitioner is that they were under bona fide impression that the service tax on the constructions provided to the educational institutions is exempted as per Circular No. 80, dated 17-9-2004 and that they only constructed classrooms, hostels, etc., which are primarily used for imparting education and not used either for commerce or industry and without deciding the issue that whether the construction provided by the petitioner to the educational institutions are used or to be used for commerce or industry in order to extend the benefit of exemption under the above said Circular, the first respondent has erroneously dealt with the issue holding that the educational institution to which the petitioner provided constructions, itself is an industry and running for profit. I find considerable force in the said contention made on behalf of the petitioner. It is also stated by the petitioner that if at all the first respondent suspected the usage of the buildings or civil structures provided by the petitioner were meant to use or to be used for the pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent is not commercial and industrial construction, therefore does not fall under the category of taxable services, as the same is not used for commercial and industry but it is used for providing education. Therefore service tax paid by the respondent is liable to be refunded. On going through the grounds of appeal, we observe that there is no dispute raised as regard the facts that the respondent by issuing credit note pot collected the service tax from the service recipient. On going through judgments cited by the respondent, we find that some of the judgments had directly on the issue of construction of Educational institute and the ratio of the judgments are applicable in the present case. We also gone through findings of the Id. Commissioner (Appeals) who has given very elaborate findings which extracted below :- 8. I further observe that the Appellants are provider of construction service and had undertaken works to construct college building. The service recipient have constructed building which was used as college to be named as VPM s Maharshi Parshuram College of Engineering, Velneshwar at Velneshwar, Ratnagiri for Vidya Prasarak Mandal, which is Public trust regis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19-9-2004 in para 13.2 has also made it clear that such trust will not be subjected to service tax. In this regard attention is drawn to Section 2(13) of Bombay Public Trust Act, 1950 which reads as : Public Trust means an express or constructive trust for either a public, religious or charitable purpose or both and includes a temple, a math, a wakf, church, synagogue, agiary or other place of public religious worship, a dharmada or any other religious or charitable endowment and a society formed either for a religious or charitable purpose or for both and registered under the Societies Registration Act, 1860 . 10. In view of the above, it is amply clear that, any entity which is either having object of involving in commercial or industrial activities or involved in such activities will never be registered as trust. It is therefore clear from the fact the service recipient is involved in non-profit making activities, and services received by said service recipient was utilized for its sole educational purposes and not for the purposes of profit. Therefore, services of constructing college building rendered by appellant to said Service recipient falls outside the scope o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exported from, or services provided, from a Special Economic Zone or from a Unit, to any place outside India; c. exemption from any duty of excise, under the Central Excise Act, 1944 (1 of 1944) or the Central Excise Tariff Act, 1985 (5 of 1986) or any other law for the time being in force, on goods brought from Domestic Tariff Area to a Special Economic Zone or Unit, to carry on the authorised operations by the Developer or entrepreneur; d. drawback or such other benefits as may be admissible from time to time on goods brought or services provided from the Domestic Tariff Area into a Special Economic Zone or Unit or services provided in a Special Economic Zone or Unit by the service providers located outside India to carry on the authorised operations by the Developer or entrepreneur; e. exemption from service tax under Chapter V of the Finance Act, 1994 (32 of 1944) on taxable services provided to a Developer or Unit to carry on the authorised operations in a Special Economic Zone; f. exemption from the securities transaction tax leviable under Section 98 of the Finance (No. 2) Act, 2004 (23 of 2004) in case the taxable securities transactions are entered into ..... 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