Maturam Construction Company Vs Commissioner (CESTAT Delhi)
The appeal before the CESTAT Delhi arose from an order of the Commissioner (Appeals), who partly allowed the appellant’s appeal while upholding part of the service tax demand confirmed by the Assistant Commissioner. The original show cause notice proposed a service tax demand of Rs. 18,81,005 for the period April 2014 to June 2017. After adjudication, the Assistant Commissioner confirmed a demand of Rs. 7,52,403 with interest under Section 75 of the Finance Act, 1994, imposed an equivalent penalty under Section 78 and a penalty of Rs. 10,000 under Section 77, while dropping the balance demand. The Commissioner (Appeals) further reduced the demand to Rs. 7,07,899, and the appellant challenged the remaining demand, interest, and penalties.
The dispute related to three categories of construction services provided to Krishi Upaj Mandi Samiti. The appellant contended that all three services were exempt under different entries of Notification No. 25/2012-ST dated 20.06.2012, whereas the Revenue maintained that the exemptions were not applicable.
The first issue concerned construction of covering over existing auction platforms. The appellant claimed exemption under Serial No. 12A(a) of the notification, which exempts specified construction services provided to the Government, local authority or governmental authority where the civil structure or original works are meant predominantly for use other than commerce, industry or business. The Tribunal held that an auction platform in a Krishi Upaj Mandi is primarily used for the auction of goods, which is essentially a commercial activity. Consequently, the construction of a covering over such auction platforms could not be regarded as works meant predominantly for non-commercial use. The exemption under Serial No. 12A(a) was therefore held to be unavailable.
