TMI Blog2023 (4) TMI 438X X X X Extracts X X X X X X X X Extracts X X X X ..... L ORDER NO. A/10845 / 2023 - Dated:- 10-4-2023 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. C.L. MAHAR, MEMBER (TECHNICAL) Shri S.J. Vyas, Advocate for the Appellant Shri G. Kirupanandan, Assistant Commissioner (AR) for the Respondent ORDER The issue involved in the present case is that whether the construction service provided by the appellant to Surat Municipal Corporation for construction of residential complex under Jawaharlal Nehru National Urban Renewal Mission (in short JnNURM ) and construction service provided to Gujarat State Police Housing Corporation Limited (in short GSPHCL ) is liable to service tax. 2. Shri S.J. Vyas, learned Counsel appearing on behalf of the appellant submits that in respect of construction service provided for construction of residential complex to both the service recipients i.e. Surat Municipal Corporation and GSPHCL under JnNURM scheme is not taxable as held in the following judgments:- (a) M/S Ganpati Mega Builders (India) Pvt. Ltd. vs. Commissioner, Customs, Central Excise Service Tax, Agra - 2021 (8) TMI 294 - Cestat Allahabad (b) M/S Jethanand Arjundas Sons Versus CCE S.T. Indore - 2018 (11) TMI 757 - C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order and allow the appeal in favor of the appellant with consequential relief. (b) In the case of M/s. Khurana Engineering Limited (supra) this Tribunal passed the following order: 9 . We have heard both sides and perused the appeal records. We are of the considered opinion that the matter requires to be examined in the light of the Section 65(91a) of the Finance Act, 1994 and the explanation thereof which reads as under : Residential Complex has been defined under section 65(91a) of the Finance Act as follows :- (91a) 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 spaces 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 pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ving more than 12 residential units with the common area. In the explanation for the removal of doubts, it was 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. In the instant case, the allottee is paying the nominal rent or without consideration. 5. From the record, it appears that the Notification No. 28/2010-S.T., dated 22nd June, 2010, clarified that the services is provided to Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awaas Yojana are exempted from the clutches of Service Tax. Further, vide F. No. 137/26/206-CX.-4, dated 5th July, 2006, it was clarified that Service Tax would not be leviable on construction of complexes under question if their lay out does not require approval by an authority under any law for the time being in force. From the letter dated 30-1-2004 issued by the M.P. Urban Development Department, it appears that the said construction was made under Rajiv Gandhi basti Vikas karyakram whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.4.2006 to 31.3.2007 ST/441/2011 Marimuthu Gounder Sons 16.6.2005 to 31.12.2007 Thus, it can be seen that part of the demand is for the period prior to 1.6.2007. By applying the decision in the case of Larsen Toubro 2015 (39) STR 913, we hold that the demand for the period prior to 1.6.207 is not sustainable and requires to be set aside, which we hereby do. 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 and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or simi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal use in the explanation. The next question that arises is whether it gets excluded under the circumstances. The circular issued by C.B.E. C. on 24-5-2010 relied upon by the learned counsel is relavant. Para 3 of this circular which is relevant is reproduced below : 3. As per the information provided in your letter and during discussions, the Ministry of Urban Development (GOI) has 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 ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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; 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. 8. We have gone through the case law relied upon by the respondents where a similar case has been dealt with by the Tribunal. Following the decision of the Tribunal in Nithesh Estates Ltd. (supra), we find no reason to interfere with the impugned orders which are sustained and the appeals filed by Revenue are rejected. 9 . Following the said decisions, the facts being identical, we hold that the levy of service tax cannot sustain. The impugned orders are set aside and the appeals are allowed with consequential reliefs, if any. (b) In the case of C R Patel (supra), this bench of Tribunal passed the following order:- 4 . We have considered rival submissions. We find that so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng 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 subcontractors all of whom have paid the tax as required under the law. The questionthat arises is whether the appellant is liable to pay service tax in respect of the complex built for ITC. From the definition it is quite clear that if the complex is constructed by a person directly engaging any other person for design or planning or layout and such complex is intended for personal use as per the definition, service tax is not attracted. Personal use has been defined as permitting the complex for use as residence by another person on rent or without consideration. In this case what emerges is that ITC intended to provide the accommodation built to their own employees. Therefore it is covered by the definition of personal use in the explanation. The ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... epartment has requested the CPWD to construct the quarters for them and funds have been made available to CPWD by Ministry of Finance for this purpose. CPWD in reality has acted as a bridge between Income tax department and the contractor and after the residential complex is constructed, the same was handed over by CPWD to Income tax department and therefore, in terms of the clarification issued by the Board also, the appellant would be liable to pay service tax. He drew our attention to the letter relied upon by the learned advocate and submitted that in that letter, it has been clarified by the Board that if NBCC were to construct residential accommodation and handover to Govt. of India, there would be no liability to service tax. However, if NBCC were to entrust the work to sub-contractor and such sub-contractor constructed the residential complex and handed over to NBCC who in turn handed over the same to Govt. of India, service tax would be leviable. He drew our attention to the observation of learned Commissioner in his order wherein he has also held that this is not a case where residence is for personal use of a person and is not covered by the explanation given under claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) Repair, alteration, renovation or restoration of, or similar services in relation to, residential complex] The definition of residential complex service has been given under clause (91a) of Section 65 as under; 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period prior to 1-6-2007. He has cited several decisions in support of this contention. However, we find that the decision of the Tribunal in the case of Cemex Engineers v. Commissioner of Service Tax Cochin - 2010 (17) S.T.R. 534 (Tri. - Bang.) is relevant. In this case, the Tribunal had considered the definition of residential complex services and works contract services and had come to the conclusion that in view of the fact that construction of new residential complex was included in the definition of works contract, the construction of residential complex on the basis of works contract, cannot be leviable to service tax prior to 1-6-2007. In view of the fact that this decision is applicable to the facts of the present case, this would also go in favour of the appellants. 5. Further, in view of the fact that on merits, we have held that service provided by the appellant is to be treated as service provided to Govt. of India directly and end use of the residential complex by Govt. of India is covered by the definition Personal Use in the explanation to definition of residential complex service, the other aspects need not be considered. In view of the discussion above, the im ..... X X X X Extracts X X X X X X X X Extracts X X X X
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