Custom, Excise & Service Tax Tribunal
Kolkata North Commissionerate vs Delta Construction on 6 August, 2025
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
EASTERN ZONAL BENCH: KOLKATA
REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No. 76819 of 2018
(Arising out of Order-in-Appeal No. 221/S. Tax-I/Kol/2018 dated 13.03.2018 passed
by the Commissioner of CGST & Central Excise, Haldia Commissionerate M.S.
Building(7th Floor), 15/1 Strand Road, Kolkata-700001
M/s. Delta Construction, : Appellant
AG-112, Slat Lake City,
Sector-II, 6th Floor, Unit No. 608,
Kolkata-700091
VERSUS
Commissioner of Service Tax, : Respondent
Service Tax-I Commissionerate,
180, Rajdanga Main Road, Kolkata-700107
AND
Service Tax Appeal No. 78454 of 2018
(Arising out of Order-in-Appeal No. 221/S. Tax-I/Kol/2018 dated 13.03.2018 passed
by the Commissioner of CGST & Central Excise, Haldia Commissionerate M.S.
Building(7th Floor), 15/1 Strand Road, Kolkata-700001
Commissioner (T & R), : Appellant
CGST & CX., Kolkata North Commissionerate,
180, Shantipally, Rajdanga Main Road,
Kolkata-700107
VERSUS
M/s. Delta Construction, : Respondent
AG-112, Salt Lake City, Sector-II
6TH Floor, Unit No. 608, Kolkata-700091
APPEARANCE:
Shri Aditya Dutta, Advocate
Ms. Mitaly Borpuzari, Tax Consultant,
For the Assessee
Shri D. Sue, Authorized Representative,
For the Revenue
CORAM:
HON'BLE SHRI ASHOK JINDAL, MEMBER (JUDICIAL)
HON'BLE SHRI K. ANPAZHAKAN, MEMBER (TECHNICAL)
FINAL ORDER NOs. 77170-77171/ 2025
DATE OF HEARING: 01.08.2025
DATE OF PRONOUNCEMENT: 06.08.2025
Page 2 of 16
Appeal Nos.: ST/76819, 78454/2018-DB
ORDER:[PER SHRI K. ANPAZHAKAN] Service Tax Appeal No. ST/76819/2018 has been filed by M/s. Delta Construction, AG-112, Salt lake City, Sector-2, 6the Floor, Unit No. 608, Kolkata-700 091 (hereinafter referred to as the appellant-assessee) against Order-in-Appeal No. 221/ST-I/ Kol/2018 dated 13/03/2018 (impugned order), wherein the demand of service tax of Rs.28,19,194/- has been confirmed along with interest and penalty. The appellant-assessee have also filed additional written submissions with respect to the appeal filed by Revenue as well as on the contentions raised by them in their appeal.
1.1. Service Tax Appeal No. ST/78454/2018 has been filed by Revenue against dropping of the demands of service tax in the impugned order.
1.2. As both the appeals deal with the same Order- in-Appeal, all are taken up together for decision by a common order.
2. The facts of the case the appellant-assessee are engaged in the provision of construction service (other than residential construction), Works Contract Service, etc. They were registered with the Service Tax department and had been filing ST-3 returns regularly.
2.1. A Show Cause Notice (SCN) dated 14.10.2015 was issued to the appellant-assessee demanding Service tax along with cess to the tune of Rs.1,68,26,981/- for the period of 2010-11 to 2014-
15. The SCN also demanded interest and penalty under section 78 & 77 of the Finance Act 1994. The demand in the SCN was made on the basis of Page 3 of 16 Appeal Nos.: ST/76819, 78454/2018-DB difference between the information available in the 26AS statements received from Income Tax department and the details furnished by the appellant-assessee in the ST-3 returns filed by them. The demands raised in the Notice are categorised under the following headings:
1.Science City:- Service Tax on work of construction science exploration hall at Science City Kolkata- Service Tax demand of Rs.52,99,258/-.
2.Renovation on New construction of technician studio for PWD Govt. of West Bengal:- Service Tax demand of Rs. 31,67,647/-.
3.Construction work done for M/s. Mackintosh Burn Ltd:- Service Tax demand of Rs.83,60,076/-.
2.2. The said Notice was adjudicated by the Additional Commissioner, wherein the Ld. Adjudicating authority has Confirmed the demand of Service Tax including Cess amounting to Rs.
91,35,027/- along with interest and imposed equal amount of tax as penalty and dropped the balance demands raised in the Notice. The Order in Original also appropriated the amount of Rs. 25,00,000/- already paid by the appellant-assessee.
2.3. On appeal, the Ld. Commissioner (Appeals) passed the impugned Order-in-Appeal dated 13.03.2018. The summary of the demands confirmed and dropped in the impugned order passed by the Ld. Commissioner (Appeals) are as under:-
Page 4 of 16Appeal Nos.: ST/76819, 78454/2018-DB
(i) On construction of Science City Exploration Hall:
Dropped the entire demand on the ground that the work was covered under Sl. No. 12(a) and 12(c)(i) of Notification no. 25/2012 dated. 20/06/2012.
(ii) On New construction of technician studio for PWD:
It was held that since the studio was used for commercial purposes therefore exemption from Service Tax is not available. Further, it was held that since benefit of construction service was already given to the appellant-assessee, therefore benefit under works contract service cannot be provided. Accordingly, it was held that the benefit of payment of 50% of service tax payable cannot be extended to them. Therefore, amount of Service Tax of Rs. 28,19,194/- was confirmed on this score.
(iii) Construction work done for M/s. Mackintosh Burn Ltd:
Adjusting the amount of Service tax already paid, demand of Rs. 5395/- was sustained.
2.4. Being aggrieved by the confirmation of the demands of service tax along with interest and penalty, the appellant-assessee filed the instant appeal. Revenue has filed appeal against the dropping of the demands on construction of Science City Exploration Hall and the appellant-assessee has filed cross objections on this issue.
3. Regarding the demand of Service Tax of Rs.
28,19,194/- confirmed on the construction of Technician Studio for PWD, the appellant-assessee Page 5 of 16 Appeal Nos.: ST/76819, 78454/2018-DB submits that the Technician Studio is a Govt. Constituted entity under the West Bengal Board of Technician Studio which is a Govt. of West Bengal controlled entity. Further, it is their submission that this construction work was entrusted to the appellant-assessee by the Public Works Department of the Govt. of West Bengal which is not a business entity, as has been accepted by the department in their Grounds of Appeal. Hence, the appellant- assessee contends that such construction work for Technician Studio provided to an entity of the West Bengal Govt. is exempted from Service Tax as per Para 12(a) and 12(c)(i) of Notification no. 25/2012- ST dated. 20/06/2012.
3.1. The appellant-assessee has not disputed their service tax liability on the Construction work done for M/s. Mackintosh Burn Ltd. Thus, the said issue is not in dispute before this Tribunal.
3.2. Regarding the dropping of the demand on the construction of Science City Exploration Hall by the Ld. Commissioner (Appeals) in the impugned order and the Revenue's appeal before this Tribunal on this issue, the appellant-assessee submits that the ld. appellate authority has held, vide paragraph 4(a)(viii) of the instant Order-in-Appeal that the exemptions accorded under Sl. No. 12(a) & 12(c)(i) of Notification No. 25/2012-ST dt. 20.06.2012 are rightly extendable to the said construction activities and thereby set aside the confirmed demand to the tune of Rs.52,99,258/- on this issue. Thus, the appellant-assessee contends that Revenue's appeal is devoid of any merit and prays for rejection of the same.
Page 6 of 16Appeal Nos.: ST/76819, 78454/2018-DB 3.3. Regarding, invocation of extended period of limitation to confirm the demands, the appellant- assessee submits that the entire case has been made on the basis of difference between 26AS, Information available in the Balance Sheet, Profit and loss Account, ST-3 and the Income Tax Returns filed by them. Hence, it is their plea that they have not suppressed any information from the department. Accordingly, the appellant-assessee submits that extended period of limitation cannot invoked in this case. In support of this claim, the appellant-assessee relied upon the decisions in the following cases:
(i)M/s. Munna Construction v CCE&ST [Final Order No. 77625/2024 dated 22.11.2024] ,
(ii) Arya Logistics v CCE &ST Rajkot [ST Appeal No. 12389 of 2014 DOD 17.08.2023]
(iii) Balajee Machinery v Comm of CGST &Excise, Patna-II [2022(66) GSTL 440 (T- Kol)]".
3.4. In view of the above, the appellant-assessee submits that the SCN dated 14/10/2015 issued for the period 2010-11 to 2014-15 is barred by limitation of time till 2013-2014. Therefore, they also argue that the major portion of the demand falls within the ambit of time bar and liable to be set aside on the ground of limitation.
4. Regarding Revenue's appeal the Ld. Departmental Representative reiterated their Grounds of Appeal. The Ld. Authorized Representative of the Revenue also submits that the Exploration Hall in Science City has been used for Page 7 of 16 Appeal Nos.: ST/76819, 78454/2018-DB commercial purpose and hence the exemptions accorded under Sl. No. 12(a) & 12(c)(i) of Notification No. 25/2012-ST dt. 20.06.2012 are not applicable.
4.1. Regarding the appeal filed by the appellant- assessee, the Ld. Authorized Representative of the Revenue submits that the Technician Studio is used for commercial purposes and hence the exemptions accorded under Sl. No. 12(a) & 12(c)(i) of Notification No. 25/2012-ST dt. 20.06.2012 are not applicable.
5. Heard both sides and perused the appeal records.
6. Regarding the demand of Service Tax of Rs. 28,19,194/- confirmed on the construction of technician studio for PWD, we observe that the Studio was constructed by the Public Works Department of the Govt. of West Bengal which is not a business entity and the same has been accepted by the Department in their Grounds of Appeal.
6.1. It is further observed that for the above said activity, the appellant-assessee has claimed the exemption as provided under Sl. No. 12(a) and 12
(c)(iii) of the Notification No. 25/2012-ST, which reads as under:
"12. Service provided to the Government , a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation or alteration of
(a) a civil structure or any other original works meant Page 8 of 16 Appeal Nos.: ST/76819, 78454/2018-DB predominantly for use other than for commerce, industry or any other business or profession.
(c)(iii) a structure meant predominantly for use as an art or cultural establishment"
6.2. From the above, we observe that the Sl. No. 12(a) of the aforesaid Notification provides exemption from service tax when an Entity provides construction of a civil structure to a governmental organization, which is meant predominantly for use other than commerce. In the present case it is a fact that the appellant-assessee has constructed the Technician Studio for the Governmental Organization i.e., the PWD department of the Government of West Bengal. If the Studio is let-out for some commercial consideration on some occasions, it would not disentitle the appellant-assessee from the exemption as provided under Sl. No.12 (a) of the Notification No. 25/2012-S.T. because the Notification does not envisage that the said civil structure must be exclusively used for the purposes other than commerce. Since the Notification only envisages that the civil structure must be used predominantly for purposes other than commerce, we observe that the exemption cannot be denied if the civil structure is occasionally used for some commercial consideration also. In the present case, we also find that the Revenue has not brought on record any evidence to substantiate their allegation that the Technician Studio has been used exclusively for commercial consideration.
6.3. Further, we also take note of the fact that the Technician Studio is not an isolated organization. It Page 9 of 16 Appeal Nos.: ST/76819, 78454/2018-DB is a part of Information and Cultural Affairs Department of the State of West Bengal. It is under the control of an Additional Secretary of the State Government. Thus, we observe that the activities of the Studio cannot be looked in isolation. The Information and Cultural Affairs Department of the State Government conducts various programs such as Kolkata International Film Festival, Tele Samman Award Ceremony, Mahanayak Uttam Kumar Award Ceremony. It is also entrusted with the task of providing Medical Benefit Scheme for the Cine and Television Artistes/ Technicians /Workers. It conducts Film Appreciation Courses. It organises Digitization and restoration of Cinematograph Films (Celluloid) of State Film Archive. Thus, we find that Technician Studio is one of the wings of the the Information and Cultural Affairs Department, which requires funds to carry out other activities of the department which are in the nature of promotion of Culture. Thus, the money generated by the Studio by letting it out for commercial consideration are used for promotion of culture of the state. Thus, we find that the Technicians Studio can be considered as a structure predominantly used for promotion of art and culture of the state of West Bengal. Accordingly, we are of the view that the activities undertaken by the appellant-assessee are covered within the scope and ambit of the exemption as provided under Sl. No.12 (a) and 12(c)(iii) of the Notification 25/2012- S.T. 6.4. Thus, we find that the exemption as provided under Sl. No.12(a) and 12(c)(iii) of the Notification 25/2012-S.T. dated 20.06.2012 cannot be denied to the appellant-assessee on the ground that the said Studio has been used for commercial purposes also.
Page 10 of 16Appeal Nos.: ST/76819, 78454/2018-DB 6.5. In view of the above findings, we hold that the construction work of Technician Studio provided by the appellant-assessee to the PWD department of the West Bengal Govt. is exempted from Service Tax as per Sl. Nos. 12(a) and (c)(iii) of Notification No. 25/2012-ST dated. 20/06/2012. Accordingly, we set aside the demand of service tax of Rs. 28,19,194/- confirmed on the construction of Technician Studio for the State PWD department. Since the demand itself is not sustainable, the question of demanding interest or imposing penalty on the appellant- assessee on this issue does not arise. Accordingly, we set aside the same.
7. Regarding, invocation of extended period of limitation to confirm the demands, we observe that the entire demand has been made on the basis of difference between 26AS, Information available in the Balance Sheet, Profit and loss Account, ST-3 and the Income Tax Returns filed by the appellant- assessee themselves. Thus, we agree with the submission of the appellant-assessee that they have not suppressed any information from the department. Accordingly, we hold that extended period of limitation cannot be invoked in this case to demand service tax. For the same reason, we hold that no penalty is imposable on the appellant- assessee.
8. With respect to the demand dropped on the construction of Exploration Hall in Science City, we observe that the Science City is an autonomous scientific organization explicitly falling under Ministry of Culture, Govt. of India and the construction carried out by the appellant-assessee is towards educational enhancement and it is exempted from service tax in terms of Circular No. B2/8/2004 dt.
Page 11 of 16Appeal Nos.: ST/76819, 78454/2018-DB 10.09.2004 and Notification No. 25/2012-ST dt. 20.06.2012. Accordingly, we find that the Ld. Commissioner (Appeals) has rightly extended benefit of the exemptions as provided under Sl. No. 12(a) & 12(c) of Notification No. 25/2012-ST dt. 20.06.2012. In this regard we refer to the findings of the Ld. Commissioner (Appeals) on this issue, which is reproduced below for ready reference:
(a) Construction of Science City Science Exploration Hall (1) First allegation against the appellant which has been contested is that they have undertaken construction work at Science Exploration Hall of the Science City, Kolkata during the period from 2010-11 to 2014-15 and after allowing abatement of 67% as applicable on Works Contract Service, total tax demand of Rs 52,99,258/- was confirmed by the lower authority on the very ground that the said organisation for which the appellant has undertaken the construction activity and sought for the exemption is a commercial organisation and in support of the said logic it was stated that entry to the said Science City is chargeable not only to the general public but also to the students and some events being exhibited therein is separately charged for viewers.
(ii) In this respect the appellant relied on some case judgments like Sapoorji Paloonji& Co. Pvt Ltd vs CCEX& ST, Patna [2016(42) STR 681 (Pat)] wherein the petitioner was entrusted for construction activity of academic complex of IIT Patna to which benefit of exemption was denied under Notification No. 25/2012 dated 20.06.2012 by the Service Tax authority as it was argued that Indian Institute of Technology was not covered under the category of Negative List (Section 66D) of the Service Tax statute.
(iii) But since the IIT was set up by an act of Parliament namely Indian Institute of Technology Act 1961, as an Institute of National Importance it was ultimately held Page 12 of 16 Appeal Nos.: ST/76819, 78454/2018-DB that the said benefit of the notification is extendable to the construction activity undertaken therein. In another reference to the case of G. Ramamoorti Construction (1) Pvt Ltd vs Commr. (Adj) Coimbatore [2015(40)STR632(Mad)) by the appellant it was held by the Hon'ble Judge that construction of educational institution and hospitals- whether such educational institutions and hospitals are profit oriented or established solely for educational purpose without any profit, were not known to lower authorities- First respondent hold contrary on mere non-production of such evidence by petitioner- An opportunity could have been provided to petitioner to produce relevant documentary Applying definition of 'Industry is unnecessary- Even assuming that educational institution is an Industry, it does not take away benefit of exemption provided under CBEC&C Circular No. 80/10/2004-ST, dated 17-09-2004, if it is established that the constructions provided by petitioner are used or to be used either not for commerce or industry Impugned Order fallacious, hence, not tenable Impugned Order set aside.
(iv) In addition to taking cue from the ratio of above two judgments, I like to review the issue on some similar other perspectives also. Ministry of Culture, Government of India operates a number of National Museums for which entry fees are charged.
There are toll taxes for National Highways and State Highways all over the country of India. Ministry of Sports and Youth Welfare organizes and maintains Stadiums and collects charges by the users and also levies fee for exhibition matches organized under their banner. But by virtue of any or all of the above activities, it cannot be inferred that there is an underlying commercial motive by such collection of fees/charges for each of the above referred instances.
(v) On of at going through the website the Science City http://sciencecitykolkata.org.in.the objectives of the organisation and the genealogy of its establishment has been noted as below:
Page 13 of 16Appeal Nos.: ST/76819, 78454/2018-DB To portray the growth of science and technology and their application in industry, human welfare and environment, with a view to develop scientific attitude and temper and to create, inculcate and sustain a general awareness amongst the people.
To promote and enhance public understanding of the culture of science and technology.
To popularize science and technology in cities, urban and rural areas for the benefit of students and for the people at large by organizing exhibitions, seminars, popular lectures, science camps and various other programmes.
To supplement science education in schools and colleges and to organize various out-of- school educational activities to foster a spirit of scientific enquiry and creativity among the students To render assistance to universities, technical institutions, museums, schools and colleges or other bodies in planning and organizing science museums and also in training of personnel for museum profession.
(vi) From the said expressed objectives, it is apparent that the said organisation is established for educational purpose particularly for the purpose of promotion, popularization and propagation of science and technology among the masses. Their declared objective according to the published website document is fully indicative of the above said purpose.
(vii) According to the said website, as they declared that they come under Ministry of Culture, Government of India and were established under the administrative control of National Council of Science Museums (NCSM), which is an autonomous society under Department of Culture, Union Ministry of Education and Culture, Government of India, the website of NCSM (http://ncsm.gov.in) was also verified. It was learnt from the said organizational Page 14 of 16 Appeal Nos.: ST/76819, 78454/2018-DB website that they administer 25 Science Centers / Museums /Planetariums spread all over India and out of which Science City Kolkata is a National level Centre of NCSM.
The Memorandum of Association, Rules and Regulations and bye-law published in the said website were also perused and from the said documentary evidences, I come to a conclusion that the said organisation, Science City under administrative control of National Council of Science Museums fall under the definition of para 12(a) and (c) (i) of Notification No.25/2012-ST dated 20.06.2012. It was also put on record that the financial grant, under which the said job at Science City was undertaken by the appellant was from the Government of India, Ministry of Culture as certified by the Administrative Officer dated 28.02.2015.
(vii) I don't agree with the view expressed by the lower authority on the method of his application of the provision of Circular No. 80/10/2004-ST dated 17.09.2004 differentiating a government structure meant for commerce or industry or otherwise in this case. From the above information available in respect of the subject organisation, mere collection of entry fee for science exhibition organized by them doesn't qualify the said organisation as one intended for commerce or industry. Rather, from the objectives enlisted in the website of the organisation categorizes them under an educational and non-profit earning body under direct control of the Ministry of Culture, Government of India, i.e. a governmental authority which is defined as:
"2(s) 'governmental authority' means a board, or an authority or any other body established with 90% or more participation by way of equity or control by Government and set up by an Act of the Parliament or a State Legislature to carry out any function entrusted to a municipality under Article 243W of the Constitution."
and according to Section 65(26A) of the Finance Act 1994, Page 15 of 16 Appeal Nos.: ST/76819, 78454/2018-DB (26A) "Government" means the Departments of the Central Government, a State Government and its Departments and a Union territory and its Departments, but shall not include any entity, whether created by a statute or otherwise, the accounts of which are not required to be kept in accordance with article 150 of the Constitution or the rules made thereunder
(viii) Therefore, as an outcome of examination on the backgrounds and facts of the issue 1 hold that the exemption accorded under definition of para 12(a) and (c)(i) of Notification No.25/2012-ST dated 20.06.2012. are rightly extendable to the said construction activities performed by the appellant."
8.1. We fully agree with the reasons given by the Ld. Commissioner (Appeals) for dropping the demand on this issue. Thus, we do not find any infirmity in the dropping of the demand of Rs. 52,99,258/- on this issue, by the Ld. Commissioner (Appeals). Hence, we do not find any merit in the appeal filed by the Revenue and accordingly, we reject the same.
9. In view of the above, we pass the following order:
(I) We hold that the construction work of Technician Studio provided by the appellant-
assessee to the PWD department of the West Bengal Govt. is exempted from Service Tax as per Notification No. 25/2012-ST dated 20/06/2012. Accordingly, we set aside the demand of service tax of Rs.28,19,194/- confirmed on the construction of Technician Studio for PWD department.
Page 16 of 16Appeal Nos.: ST/76819, 78454/2018-DB (II) We hold that the Ld. Commissioner (Appeals) has rightly extended benefit of the exemptions as provided under Notification No. 25/2012-ST dated 20.06.2012 on the construction of Exploration Hall in Science City. Hence, we do not find any infirmity in the dropping of the demand of Rs.52,99,258/- on this issue. Thus, we do not find any merit in the appeal filed by the Revenue and hence we reject the same.
(III) The demands of interest and penalties confirmed in the impugned order are set aside.
10. In the result, the appeal filed by the appellant-assessee is allowed and the appeal filed by the Revenue is rejected.
(Order Pronounced in Open court on 06.08.2025) (ASHOK JINDAL) MEMBER (JUDICIAL) (K. ANPAZHAKAN) MEMBER (TECHNICAL) RKP