TMI Blog2023 (6) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax has been borne by the Appellant, they have rightly lodged the refund claim. In view of the various documentary evidence and certificates and registrations of the Appellants and analysis thereof and also considering the observations of the ld. Commissioner (Appeals) on this, there is no doubt that building constructed by the Contractor is medical college building - it is also noticed that the Appellant have been granted registration of Trust under Section 12AA of the Income Tax Act which shows that Appellant have been registered for non-commercial purpose. Since the organization of the appellant itself is non-profit purpose, it cannot be said that the building is used for commercial activity. Therefore we do not agree with the finding of the Ld. Commissioner that the activity of running medical college is nothing but a commercial one and same cannot be construed as non-commercial activity/ organization. C.B.E. C. had issued Circular No. 80/10/2004-S.T., dated 17-9-2004 and in Para 13.2 clarified that the leviability of Service Tax was primarily dependent upon the use of the building or civil structure. Further, it clarified that it was to be ascertained where buildin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d orders-in-appeal, appellant filed the present appeals. 3. Shri, Hardik Modh, Learned Counsel appearing on behalf of the appellant submits that it is undisputed fact that the appellant has been registered as non-commercial entity. The appellant has neither declared dividend nor distributed surplus /profit to its shareholders, trustees and / or members but ploughs back the surplus for the purpose of an object of the organization would be charitable organization. 3.1 He also submits that both the lower authorities failed to appreciate the contents of the Resolution No. HSP/1007/3247/PARK-2/A dated 27.05.2009 passed by Government of Gujarat wherein following points are specifically mentioned. a. Allocation of land for hospital and medical college; b. Fees and admission of the medical college; c. Enhancement of the bed capacity over a period of five years so that requirement of the Medical Council of India is fulfilled every year for the new incoming batch of students in the medical college; d. The appellant bears revenue and capital expenditure for the medical college; e. Income generate out of the medical college has to be spent only on the development of the ho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... functions. He also placed reliance on the following judgments. B.G. Shirke Construction Technology Pvt. Ltd. Vs. CCE 2014 (33) STR 77 (Tri. Mumbai) Commissioner of Service tax Vs. S.M. Sai Construction -2016 (42)STR 716 Institute of Banking personal Selection Vs. Commissioner of S.T. -2007 (8) STR 579. 3.5 He also submits that the Ld. Commissioner (Appeals) erred in relying upon para 3 of the Resolution dated 27.05.2009 that the Government and Hospital Management Committee has no control and no interference relating to management affairs of the medical college. The Resolution reveals that the management would decide the fees and admission of the college subject to control of the autonomous committee appointment by the government. Further the fund generated out of the college would be exclusively used for the development of the hospital. It is undisputed fact that the appellant being registered as a non-commercial entity will not be in a position to distribute the profit and therefore, the entire fund would be used for development of hospital and college. 3.6 He further submits that the Ld. Commissioner (Appeals) erred in holding that income tax and service tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed issue to be decided in the present appeals is whether the appellant, as recipient of service, is eligible for refund of service tax paid by service provider and whether the appellant can be termed as non-commercial organization. 5.1 In the present matter disputed service tax amount after recovered from the appellant paid by the contractor to the Government account and said fact has not been disputed by the department. The fact that the recipient of the service is also entitled to file a claim for refund is no longer res Integra. With regard to the issue, as to whether, the service recipient can claim refund of service tax, the Hon ble Allahabad High Court, in the case of Indian Farmers Fertilizers Coop Limited2014 (35) S.T.R. 492 (All.)(Supra), have ruled in affirmative. The relevant paragraph is extracted below : 15. The Tribunal was clearly, in our respectful view, correct and justified in following this principle. The assessee is the recipient of the taxable service provided by RGTIL and had borne the incidence of service tax. Hence, the assessee is entitled to claim a refund of excess service tax paid consequent upon the downward revision of the transmission charges ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2AA of the Income Tax Act which shows that Appellant have been registered for non-commercial purpose. Since the organization of the appellant itself is non-profit purpose, it cannot be said that the building is used for commercial activity. Therefore we do not agree with the finding of the Ld. Commissioner that the activity of running medical college is nothing but a commercial one and same cannot be construed as non-commercial activity/ organization. 5.4 The appellant also argued that, whether, the building is for commercial or otherwise the primary use of such building is required to be seen. We find that this argument is convincing as the similar issue has been considered by this Tribunal in the case of B.G. Shirke Construction Technology Pvt. Ltd. Vs. C.C.E. 2014 (33) S.T.R. 77 (Tribunal Mumbai), wherein it was held that merely because some amount is charged for using the facility of this stadium the same cannot be commercial construction. The said decision was upheld by the Hon ble Bombay High Court reported in 2019 (25) GSTL 8 (Bom). The similar issue has been considered in the case of Commissioner of Service Tax Vs. S.M. Sai Construction 2016 (42) STR 716 wherein the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able trust cannot lose its identity as Charitable Trust. On this basis it cannot be construed that the institution is a commercial institution. This issue has been considered in the following Judgments: Dr, Jivraj Mehta Smarak Health Foundation and Medical Centre Vs. Ahmedabad -2004 (176) ELT 638 (Tri. Mum.) 5. We have heard both sides. The appellants have clearly established that they are a Research Institution carrying out research in the field of cardiac diseases and disorder. They are registered as Research Institution with Ministry of Science and Technology, Department of Scientific Industrial Research. We, therefore, agree with the appellants that there has been no contravention of the Notifications in so far as it relates to import by Research Institute. Regarding recovery of charges by the appellants, as held by the Tribunal in the case of Collector of Customs v. Murugappa Chettiar Research Centre [1998 (100) E.L.T. 439 (Tri.)], merely because some fee is charged for the service, it would not make any Institution a Commercial Institution, as commercial activity has distinct connotation. It cannot be stated that the appellants are engaged in any commercial activi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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