Coronation Park Is a Historical Site, Construction There Is Exempt from Service Tax: CESTAT New Delhi

The Principal Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at New Delhi has held that Coronation Park, being a historical site of national importance, is eligible for exemption from Service Tax under Notification No. 25/2012-ST.

A Bench comprising Judicial Member Binu Tamta and Technical Member Hemambika R. Priya heard cross appeals filed by Ajab Singh & Co. and the Revenue against a common Order-in-Original passed by the Commissioner, Rohtak.

The Bench observed:

“The Coronation Park is a historical site and of importance to the history of this nation. Hence, we hold that the same is eligible for exemption under the said notification. Further, provision of parking in such parks is for public utility, and charging of nominal charges does not make it commercial.”

Ajab Singh & Co, a contractor engaged by the Delhi Development Authority (DDA), executed works at Coronation Park, including construction of roads, drains, boundary walls, residential complexes, parking facilities, and other development works.

The Commissioner issued a show cause notice proposing a demand of over Rs. 1.10 crore under “Construction of Residential Complex Service” for FY 2011–12. The adjudicating authority dropped a major portion of the demand but confirmed Rs. 9.59 lakh under “Works Contract Service” (WCS).

Ajab Singh & Co challenged the confirmation, while the Revenue filed a cross appeal against the dropped demand, particularly regarding the construction of an International Centre and Restaurant at Coronation Park, alleging these to be commercial in nature.

The Tribunal held that the demand was unsustainable as it had been confirmed under WCS instead of the originally proposed category. It therefore set aside the Rs. 9.59 lakh demand.

On the Revenue's appeal, the Tribunal examined whether the activities at Coronation Park were eligible for exemption. Ajab Singh & Co argued that the site is a historical monument and that parking facilities serve tourists, qualifying for exemption.

The Tribunal noted that Coronation Park hosted the Delhi Durbars and the foundation ceremony of New Delhi, houses the largest and tallest statue of King George V (moved in the mid-1960s from a site opposite India Gate), and stands opposite the Coronation Memorial commemorating the 1911 Durbar. It observed:

“The decision to hold the Coronation Durbars in Delhi at the vast open ground at Coronation Park was a move to emphasise the historical significance of Delhi as the former capital of the Mughal Empire. Coronation Park also has the largest and tallest statue of King George V. The statue was moved here in the mid-1960s from a site opposite India Gate in the centre of New Delhi. It is opposite an obelisk called the Coronation Memorial, which commemorates the 1911 Durbar, when George V laid the foundation stone for the new capital city of New Delhi.”

Relying on Notification No. 25/2012-ST, which exempts services in relation to historical monuments, the Tribunal held that construction and development activities at Coronation Park are exempt. Ancillary facilities such as parking are for public utility, and nominal charges do not make them commercial.

The Tribunal further noted that any demand confirmed under a different service category than proposed cannot be sustained. The Bench concluded:

“The parking constructed next to a historical site cannot be considered as commercial in nature. Further, the exemption contained in sl no 12 of Notification No. 25/2012 is available to the appellant. Further, as the demand has been confirmed under WCS, whereas the demand was raised under a different head, hence even if there was a demand on the construction of International Centre & Restaurant, the same cannot be upheld.”

Accordingly, the Tribunal allowed the appeal filed by Ajab Singh & Co. and dismissed the Revenue's cross appeal.

For Appellant: Mihir Ranjan, Special Counsel and Rajeev Kapoor, Authorised Representative

For Respondent: A.K.Batra and Sakshi Khanna, Chartered Accountant