2019 (2) TMI 87 – CESTAT CHENNAI – TMI – Works Contract – Construction of Residential Complex Service – period from February 2006 to February 2008 – whether construction of quarters for police personnel would fall within the taxable service of construction of complex service under section 65(30a) r/w section 65(105)(zzzh) of Finance Act, 1994? – Held that:- Undisputedly, the appellants have entered into an agreement with TNPHCL for providing services in relation to construction of residential complex. However, these are meant for use of police personnel.
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The said issue was considered by the Tribunal in the case of Nithesh Estates [2015 (11) TMI 219 – CESTAT BANGALORE], where it was held that that for the period after 1.6.2007, the levy cannot sustain.
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The levy of service tax cannot sustain – appeal allowed – decided in favor of appellant. – Appeal No. ST/424/2012 – Final Order No. 43023/2018 – Dated:- 20-11-2018 – Ms. Sulekha Beevi C.S., Member (Judicial) And Shri Madhu M
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ce tax prior to 1.6.2007 is settled by the decision of the Hon ble Supreme Court in the case of Commissioner of Central Excise Vs. Larsen & Toubro Ltd. – 2015 (39) STR 913 (SC). The Hon ble Supreme Court in the case of Commissioner of Central Excise Vs. Sobha Developers Ltd. – 2017-TIOL-29 has affirmed the decision in the case of Larsen & Toubro Ltd. which was followed by the Tribunal in the case of URC Construction P. Ltd. Vs. Commissioner of Central Excise – 2017 (50) STR 147. The ld. counsel argued that for the period after 1.6.2007, the levy cannot sustain in terms of the decision in the case of Nitesh Estates Vs. Commissioner of Central Excise – 2015 (40) STR 815. That this Tribunal in the case of Commissioner of Central Excise Vs. Lanco Tanjore Power Co. Ltd. vide Final Order No. 40792 & 40793/2018 dated 16.3.2018 held that when construction activity is undertaken for personal use, the same is excluded from the definition of residential complex contained in Section 65
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rder. 5. Heard both sides. 6. The issue is whether construction of quarters for police personnel would fall within the taxable service of construction of complex service under section 65(30a) r/w section 65(105)(zzzh) of Finance Act, 1994. The period involved in the present appeal is prior and after 1.6.2007. Thus, by applying the decision in the case of Larsen & Toubro – 2015 (39) STR 913 (SC), we hold that the demand for the period prior to 1.6.2007 is not sustainable and requires to be set aside, which we hereby do. 6.1 For the period after 1.6.2007, the ld. counsel has argued that the decision in the case of Nithesh Estates (supra) would apply. The definition of residential complex is reproduced as under:- As per section 65[(30a) of the Finance Act, 1994, construction of complex‟ means :- (a) construction of a new residential complex or a part thereof; or (b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor
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al use as residence by such person. Explanation. For the removal of doubts, it is hereby declared that for the purposes of this clause, (a) personal use includes permitting the complex for use as residence by another person on rent or without consideration; (b) residential unit means a single house or a single apartment intended for use as a place of residence; 6.2 Undisputedly, the appellants have entered into an agreement with TNPHCL for providing services in relation to construction of residential complex. However, these are meant for use of police personnel. The said issue was considered by the Tribunal in the case of Nithesh Estates (supra), wherein the Tribunal has observed as under:- 7.1 In this case there is no dispute and it clearly emerges that the residential complex was built for M/s. ITC Ltd. and appellant was the main contractor. Appellant had appointed sub-contractors all of whom have paid the tax as required under the law. The question that arises is whether the appella
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s directly engaged the NBCC for constructing residential complex for Central Government officers. Further, the residential complexes so built are intended for the personal use of the GOI which includes promoting the use of complex as residence by other persons (i.e. the Government officers or the Ministers). As such the GOI is the service receiver and NBCC is providing services directly to the GOI for its personal use. Therefore, as for the instant arrangement between Ministry of Urban Development and NBCC is concerned, the Service Tax is not leviable. It may, however, be pointed out that if the NBCC, being a party to a direct contract with GOI, engages a sub-contractor for carrying out the whole or part of the construction, then the sub- contractor would be liable to pay Service Tax as in that case, NBCC would be the service receiver and the construction would not be for their personal use. It can be seen that if the land owner enters into a contract with a promoter/builder/developer
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ructed for use as quarters of the employees of M/s. Lanco. It is evident from the facts of the case that M/s.Lanco has engaged the assessee with the specific purpose of construction of such residential units which are meant for personal use of the employees of M/s. Lanco. We extract below the statutory definition of section 65(91a) of the Finance Act, 1994:- Residential complex means any complex comprising of (i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as resi
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