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2019 (3) TMI 979 - HC - Service TaxCommercial or industrial construction service - construction of Shiv Chatrapati Sports Complex - scope of Section 65(25b) of the Finance Act - whether, user of the stadium area to the extent of 1/3 rd of the total area for commercial purpose would tantamount to 'commercial or industrial construction service' as defined by Section 65 (25)(b) of the Finance Act, 1994? Held that:- It is not even the case of the appellant that the stadium is exclusively used for commercial purpose. Relying on materials which indicate that 1/3rd of the area of the stadium can be utilized for commercial purpose, other than sports, the appellant wants us to arrive at a conclusion that construction is commercial construction service as defined under Section 65(25b) of the Finance Act, 1994. No doubt, various rates are specified for different facilities in the sports complex - it is not even the case of the appellant that sports complex is exclusively or even primarily used for commercial purpose. The plain meaning of definition of Commercial or industrial construction service, as can be understood from the definition clause, more particularly, the clarification contained in clauses (i), (ii), (iii) is that the construction ipso facto is not leviable to service tax, but it is only when it is used, or to be used, primarily for “commerce” or “industry” or work intended for “commerce” or “industry” that service tax can be levied. Thus, it is only that construction which is to be used or primarily to be used for commerce that is subject to levy of service tax. In the present facts, the dominant user of the sports complex is noncommercial. The definition uses the words “used or to be used primarily for commerce or industry” clearly indicating that the user is to be exclusively for commercial purpose or at least it must be primarily for commercial purpose. The definition leaves us in no manner of doubt that if the predominant user of the “sports stadium” is not commercial, then the same cannot be subjected to levy of service tax - Thus, in the facts of the present case, though an area to the extent of 1/3rd is used for commercial purpose prescribing separate rates for such user, this by itself is not sufficient to attract service tax. Appeal dismissed.
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