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M/s. Ishwar Natthuji Vaidya Versus Commissioner of Central Excise, Nagpur

2017 (10) TMI 439 - CESTAT MUMBAI

Commercial or Industrial Construction service - charitable organization - taxability - case of appellant is that APMC is charitable trust therefore service provided to charitable trust is not for commercial purpose hence the same is not taxable - Held that: - adjudicating authority has not utterred a word as regard the above submission, therefore matter needs to be re-considered by the adjudicating authority particularly on the above submission made by the appellant before the adjudicating autho .....

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r for construction of new cotton market development project under Technology mission at Agriculture Produce Market Committee(APMC) Daryapur, and Varud both of Amravati District. The show cause notice was issued contending that service provided by the appellant is classifiable as Commercial or Industrial Construction under Section 65(25B) of the Finance At, 1994 and the service provider of these services has to pay service tax under Section 68 of the Act at the rate specified under Section 66 of .....

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fall under Commercial or Industrial Construction, accordingly it is not taxable. He submits that as per the decision of income tax in case of Commissioner of Income Tax Vs. Agricultural produce Market Committee [291 ITR 419Bom (Bombay High Court] passed by the Hon ble Bombay High court, the APMC has been treated as Charitable organization, accordingly the service provided to the charitable organization cannot be treated as commercial or industrial construction therefore same is not taxable. He r .....

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, therefore construction done by the appellant is used by APMC being charitable organization, not liable to service tax. He further submits that there is no specific definition of chargeable trust is provided in the service tax law therefore for the purpose of term 'chargeable trust' judgment of income tax would be applicable as per Hon ble Supreme Court judgment in case of Dai Ichi Karkaria Ltd Vs. Commissioner[ 1999 (112) ELT 353 (S.C.)]. 3. On the other hand, Shri. B Kumar Iyer, Ld. S .....

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roduce, therefore there is no dispute that the building per say is used for Commercial activity, accordingly, the construction service provided by the appellant clearly falls the under the definition of "Commercial or Industrial Construction service", hence taxable. 4. We have carefully considered the submissions made by both sides and perused records. 5. We find that appellant strongly argued that APMC is charitable trust therefore service provided to charitable trust is not for comme .....

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provision for distribution of surplus or capital amongst its members. It is run and managed by market fund and the said market fund is to be expended only for the purposes mentioned in the Act. In support of their contention that APMC is a nonprofit organization Noticee relied on a judgment of Hon- Bench of Nagpur Tribunal in case of Agricultural Produce and Market Committee V/s Commissioner of Income Tax 3rd June 2005 (2006 100 1TD 1 Nag, 2006 283 ITR 178 Nag). In the given case it has been he .....

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ligation also. Thus any trust, institution or any other legal obligation is entitled to registration under Section 12A/I2AA if its objects are of charitable nature as defined in Section 2(15) of IT Act, 1961 and its activities are genuine. So there is no need of that the APMC is not governed by Mumbai Public Charitable Trust Act, 1950 Noticee referred to following judgments in support of their above contention. CIT v. Surat Art Silk Cloth Manufacturers Association (supra)- Commr. of Agrl. IT v. .....

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for charitable purposes. 3.10 Noticee submitted that the Agricultural Producing and Marketing Committees are Non Profit and non commercial bodies is also justified by following judgments- 1. CIT v. Andhra Chamber of Commerce ; 2. Addl. CIT v. Surat Art Silk Cloth Manufacturers Association ; 3. Director of IT v. Bharat Diamond Bourse (2003) 259 ITR 280 (SC); 4. Commr. of Agrl. IT v. Rubber Board ; 5. Director of IT (Exemption) v. Agri-Horticultural Society ; 6. U.P. Forest Corporation v. Dy. CTR; .....

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