TMI Blog2023 (2) TMI 779X X X X Extracts X X X X X X X X Extracts X X X X ..... s used for personal use then such activity would not be subject to service tax. The use of the residential complex by (GSPHCL) is excluded from the definition of residential Complex as intended for personal use as residence by such persons - Appeal allowed. - Service Tax Appeal No. 11571 of 2013 - A/10257/2023 - Dated:- 1-2-2023 - MR. RAJU, MEMBER (TECHNICAL) AND MR. SOMESH ARORA MEMBER (JUDICIAL) Shri. S J Vyas, Advocate for the Appellant Shri. Ghanasyam Soni, Additional Commissioner (AR) for the Respondent ORDER. This appeal has been filed by M/s. R N Dobairya against demand of service tax as Construction of Residential Complex Service and Works Contract Service . 2. Learned Counsel for the appellant pointed out that they were engaged by Gujarat State Police Housing Corporation Ltd. (GSPHCL). He relied on decisions of Tribunal in the case of Lanco anjore Power Co. Ltd. and Sima Engineering to assert that, they are not covered in definition of Works Contract Service or Construction of Residential Complex . 3. Learned (AR) relied on the impugned order. He argued that GSPHCL is not a Government body. 4. We have considered rival submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... consideration; (b) residential unit means a single house or a single apartment intended for use as a place of residence; The above definition specifically excludes construction undertaken for personal use and such personal use includes permitting the complex for use as residence by another person. We find that the above exclusion clause covers the construction activity undertaken by the assessee . 4.2 The definition of residential complex in both the above services excludes from the levy of Service Tax complex which is constructed by a person directly engaging any other person for designing or planning of the lay out and the construction of such complex is intended for personal use as residence by such persons. This expression has been interpreted by Tribunal in the case of Sima Engineering- 2018 (5) TMI 405(Tri.-Chennai), wherein after examining this conclusion para 7 8 as follows: 7. Undisputedly, the appellants have entered in to 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 Es ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ided service of design, planning and construction and if the property is used for personal use then such activity would not be subject to service tax. It is quite clear that C.B.E. C. also has clarified that in cases like this, service tax need not be paid by the builder/developer who has constructed the complex. If the builder/developer constructs the complex himself, there would be no liability of service tax at all. Further in this case it was different totally, the appellant, has engaged sub-contractors and therefore rightly all the sub-contract or shave paid the service tax. In such a situation in our opinion, there is no liability on the appellant to pay the service tax. 4.3 The said decision was followed by the Tribunal in the case of Lanco Tanjore Power Co. Ltd. (supra) wherein the Tribunal discussed as under:- 7. Construction of residential complex activity was carried out by the assessee for M/s. Lanco. It is submitted that such residential units were constructed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the complex for use as residence by another person on rent or without consideration. In view of the definition of Personal Use in the definition of Construction of Complex services, the services provided by the appellant is covered by exclusion, which provides that definition of service does not include the 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. In this case, the Govt. of India provides 80 flats to Income Tax department on rent and therefore, it is excluded from the definition of construction services. He also relies upon the reply given by the Central Board of Customs and Excise to National Building Construction Corporation Limited (NBCC), vide Letter No. F. No. 332/16/2010-TRU., dated 24-5-2010, in support of this contention. On the other hand, learned DR submits that it is not correct to say that service has been provided to Govt. of India directly. He submits that the land is owned by Income Tax department and Income Tax department has requested the CPWD to construct the quarters for them and funds have been made available to CPWD by Ministry of Finance for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, learned DR also could not show whether there was any agreement between Income tax department and CPWD for the purpose of construction of residential complex. Invariably when two parties are independent entities, there would be an agreement. Absence of any agreement between CPWD and Income tax department also supports the case of the learned advocate. Further, since on behalf of the President of India contractors are entered into, agreements are entered into and bonds are accepted, Govt. of India is treated as Person . Therefore, we are unable to agree with the learned Commissioner when he says that the exclusion clause in the definition cannot be applied to the Govt. of India. For ready reference, definition of Construction of Complex Services is reproduced :- (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 and wall tiling, wall covering and wall preparing, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) Repair, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew is taken that CPWD is to be treated as separate entity, in our opinion appellant would be justified to entertain a belief that CPWD and Income Tax department are to be treated as part of the Govt. of India and therefore, services provide by him would not be liable to service tax. Further, as submitted by the appellant in his submission, the agreement also provides that in case of liability of any tax, the service receiver is liable to pay. In these circumstances, the appellants had no reason to resort to suppression or mis-declaration of the facts to avoid payment of service tax since if the service tax was liable, as per the contract, CPWD was liable to pay service tax. Under these circumstances, invocation of extended time limit cannot be justified in this case. Therefore, penalties imposed under various sections of Finance Act, 1994 also cannot be upheld. 4 . Another alternative submission made by the learned advocate was that the contract between the appellant and the CPWD was a works contract and VAT has been paid treating the same as works contract and therefore, no service tax was liable to be paid for the period prior to 1-6-2007. He has cited several decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X
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