TMI Blog2023 (7) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... l No. 12892 of 2014- DB - Final Order No. A/ 11389 /2023 - Dated:- 28-6-2023 - HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR And HON'BLE MEMBER (TECHNICAL), MR. C.L. MAHAR Shri. Vikas Mehta, Consultant for the Appellant Shri Kalpesh P Shah, Assistant Commissioner (AR) for the Respondent ORDER RAMESH NAIR The issue involved in the present case is that whether the appellant is liable to pay the service tax under the head of Construction of Residential Complex provided to Surat Municipal Corporation under the Jawaharlal Nehru National Urban Renewal Mission. 2. Shri Vikas Mehta, Learned Consultant appearing on behalf of the appellant at the outset submits that the issue is no longer res-integra as the same has been decided in favour of the assessee in the following judgments:- Natvar Construction Co. 2023 (4) TMI 438 CESTAT AHMEDABAD Khurana Engineering Limited- 2022 (12) TMI 1053 -CESTAT AHMEDABAD 3. Shri Kalpesh P Shah, Learned Assistant Commissioner (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. 4. We have carefully considered the submission made by both sides and perused the records. We f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 personaluse as residence by such person. Explanation : For the removal of doubts, it is hereby declared that for the purposes of this clause. (a) personaluse 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; The perusal of the above definition makes it dear that the complex which is constructed with an intention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 which was the Central sponsored scheme and the same is exempted from service tax as per Circular No. 125/2010-S.T., dated 30th July, 2010. 5. In the light of above discussion and by considering the facts and circumstances of the case, we are of the view that the M.P Government has constructed the accommodation for the gandi basti people under the Central sponsored scheme which is attempted to clean India as per Prime Minister s mission. 6. When it is so, then we find no merits in the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rgued 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 similar services in relation to, residential complex;] As per 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 who himself provided 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 wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 far as the period prior to 01.06.2007 is concerned it is not in doubt that the demand has been made in the category of works contract service . The works contract service was not taxable prior to 01.06.2007 has held by Hon ble Apex Court in the case of Larsen Toubro Ltd (Supra) , consequently the demand for the period 01.06.2007 made under the category of the works contract service is set aside. 4.1 So far as the period after 01.06.2007 is concern it is seen that the definition of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 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 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (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 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 undertakenfor 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 whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 clause (30a). We have considered this submission. We find ourselves in agreement that the contention of the learned advocate that service has been provided by the appellant to Govt. of India in this case and CPWD and Income Tax department cannot be treated as separate entities just because service has been provided to CPWD who in turn handed over the same to Income Tax department. Further, learned advocate also drew our attention to the notice issued by the CPWD inviting tenders. The tender starts with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ities 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 consideration; (b) residential unit means a single house or a single apartment intended for use as a place of residence. ] We have already explained the submission of learned advocate in brief and as explained by him in this case, residential complex constructed by the appellant is meant for use by the Income Tax department to provide the same on rent to the employees and therefore, it is clearly covered by the explanation given for Personal use in the definition. In this case the CPWD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 impugned order cannot be sustained and accordingly the same is set-aside. Appeal is allowed with consequential relief to the appellant. 5. Relying on the aforesaid decision, we hold that 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 . In view of above, we do not find any merit in the order, the order is set aside and appeal is allowed. 5. In view of the above judgmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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