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ST – Collection of fees for promoting or allowing a person to use facility by National Rifle Association of India will not make the building commercial - ST demand under CICS not sustainable: CESTAT

By TIOL News Service

NEW DELHI, FEB 07, 2018: SERVICE Tax demand under the head "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, Dehradun was confirmed against the appellant along with penalties.

The appellant is before the CESTAT and submits that National Rifle Association of India is an official body for Shooting Sports in India and is affiliated to, among others, International Shooting Sport Federation and Commonwealth Shooting Federation; that they are official body for the sports activities in India and are recognized as such by the Ministry of Youth Welfare & Sports.

Regarding construction of campus building for ICFAI University, Delhi, it is submitted that the said university is created by an Act of Uttranchal Legislative Assembly in 2003 and is a recognized university in terms of UGC Act, 1956 providing recognized courses for education.

Inasmuch as in view of the above, the activities undertaken by them in construction of the two buildings cannot be taxed under "Commercial or Industrial Construction Service".

After considering the submissions, the Bench observed –

"5. Regarding the Headquarter building of National Rifle Association of India, we find 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. They are engaged in recognized sports activities and their headquarter is situated in the said building. We are of the considered view that the building cannot be considered as commercial building for service tax purposes .

6. With reference to building in the campus of ICFAI University, Dehardun, it is clear that the said building is for use by a recognized university for education. The same also cannot be considered as commercial building. We note that the impugned original order proceeded to hold this as commercial building only on the basis of fees collected for the activities or participation in Rifle Association as well as by the university. We note that collection of fees for promoting or allowing the person touse the facility by these bodies will not make the building commercial."

Concluding that the nature of occupants' activities carried out in the building cannot be considered as commercial in nature resulting in construction of commercial building so as to be charged under CICS, the impugned order was set aside and the appeal was allowed.

(See 2018-TIOL-465-CESTAT-DEL)


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