The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Kolkata bench has held that the contract of supply of goods can’t be classifiable under ‘Commercial or Industrial Construction’ and demand of service tax is not sustainable.
Shri Rajeev Agarwal appeared for the Appellant and Shri K Chowdhury & Shri S Mukhopadhyay appeared for the Respondent.
M/s. Simplex Projects Limited has undertaken the construction of accommodation for urban employed youth & women vendors at New Market and Laxmi Market at Imphal, Manipur, in terms of the contracts awarded by National Building Construction Corporation Limited (NBCC) on behalf of the Ministry of Urban Development & Poverty Alleviation, Govt. of India.
The fund was released to NBCC by the Govtout of the non-lapsable central pool of resources for the development of the NorthEastern States. The main contract was awarded to NBCC, which was the nodal implementing agency, which in turn has sub-contracted the entire work on a back-to-back basis by retaining 10% of the total contract value.
The assessee submitted that since the contract has been undertaken for the construction of accommodation for Urban employed Youth and Women Vendors on behalf of the Ministry of Urban Development & Poverty Alleviation, Govt. of India, the same cannot be said to be for commercial purpose.
It was observed that the scope of the contract included the supply of goods, the same cannot be classified under the service category of Commercial or Industrial Construction but under ‘Works Contract service’ which classification has not been invoked in the SCN proceedings.
Shri P K Choudhary, member(judicial) Shri P Anjani held that “the instant demand for service tax under the category of Commercial or Industrial Construction cannot be sustained and hence, set aside.”
Shri Rajeev Kumar Agarwal appeared for SPL, whereas Shri K. Chowdhury and Shri S. Mukhopadhyay, Ld. A/Rs. both appeared for the Revenue. None appeared for NBCC.
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