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January 2014

2013 (32) STR 451 (Tri-Mumbai) Anand Construction Co. vs. CCEx, Kolhapur

By Puloma Dalal, Jayesh Gogri, Mandar Telang Chartered Accountants
Reading Time 1 mins
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Whether service tax on construction of a hostel building can be confirmed on the ground of non-production of evidence for the use of the said building without any factual allegation of its commercial use?

Facts:
Appellant constructed a hostel for an educational institution which was to be used for stay by the students of the said institution. Respondent issued SCN and demanded service tax on the activity of construction of the said hostel building. Appellant contended that since the building was constructed for the purpose other than commercial purpose, service tax was not applicable and Respondent did not dispute the facts. Revenue considered it taxable as no evidence of the claim of noncommercial use was produced.

Held:
Tribunal held that since the said building was constructed for the purpose of residence of students and there was absence of allegation that building was being used for any other purpose, set aside the demand and granted the relief.

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