In M/s Vij Construction Pvt. Ltd, Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) quashed service tax demand and held that collection of fees for allowing a person to use the facility by National Rifle Association of India will not make the building commercial.
In the instant case, the assessee company engaged in the business of construction works. During the year the assessee put to service tax liability under “Commercial and Industrial Construction Service” for their activities of constructing two buildings, one for National Rifle Association of India and another one for ICFAI University.
However, the tax authority held that those buildings are commercial in nature and accordingly, confirmed the service tax liability on the appellant along with penalties. Thereafter the assessee approached the Tribunal on appeal.
Before the Tribunal counsel for the assessee advocate Deepak Agarwal submitted that National Rifle Association of India is an official body for Shooting Sports in India and is affiliated to, among others, International Shooting Sports Federation and Commonwealth Shooting Federation. They are the official body for the sports activities in India and are recognized as such by the Ministry of Youth Welfare & Sports and also presented supporting documents in order to prove his arguments.
After considering the facts and circumstances, the Tribunal comprising of Judicial Member S.K. Mohanty and Technical Member B. Ravichandran observed that “regarding the Headquarter building of National Rifle Association of India, it has found 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 and are engaged in recognized sports activities and their headquarter is situated in the said building, hence the same cannot be considered as commercial building for service tax purposes”.
Tribunal further analyzed that the revenue passed the order only on the basis of fees collected for the activities or participation in Rifle Association as well as by the university. While concluding the issue the Tribunal declared that collection of fees for promoting or allowing the person to use the facility by these bodies will not make the building commercial.
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