TMI Blog2023 (9) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... e AMC and AUDA for urban poor people for their residential use, the same amounts to personal use‟. The confirmation of demand qua these services by the Commissioner is therefore not sustainable. Thus, the construction of Complex under the same scheme has been considered by this Tribunal and viewed that such construction of Complex is not liable to service tax. Therefore, following the above decision of this Tribunal, in the present case also the impugned order is not sustainable hence the same is set-aside. Appeal allowed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. C.L. MAHAR, MEMBER (TECHNICAL) Shri Amal Dave, Advocate for the Appellant Shri Tara Prakash, Deputy Commissioner (AR) for the Respondent ORDER The issue involved in the present case is that whether the appellant is liable to pay service tax under the category of Construction of Complex service for the service related to construction of houses under Jawaharlal Nehru National Urban Renewal Mission (JnNURM for short) and for Safai Kamdar to Ahmedabad Municipal Corporation or otherwise. 2. Shri Amal Dave, learned Counsel appearing on behalf of the appellant, at the outset submits t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oubts, 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 perusal of the above definition makes it dear that the complex which is constructed with an intention for personal use as residence by a person who is directly engaging any other person for designing/planning of layout and the construction of such complexes out of the ambit of such construction and thus from taxability. We draw the support from the case of C.C.E., Aurangabad v. Mall Enterprises - 2016 (41) S.T.R. 119 (Tri.-Mum.) wherein it was held that not only residential complex is designed or laid out by another person are excluded from the definition but also the ones intended for personal use of such person i.e. the owner of the complex. In another case titled as Nithesh Estates Limited v. C.C.E., Bangalore, 2015 (40) S.T.R. 815 wherein it was held that the construction of residential complex for ITC (in that case) intended to provide accommodation built for own em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 impugned order as no service tax is leviable in the instant case. Hence, the impugned order is set aside. The appellant will get the relief accordingly. From the above judgment it can be seen that the identical fact is involved in the above judgment and in the case in hand in as much as in both the cases the construction service was provided to Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awaas Yojana. On this common fact in the above judgment it was held that the service tax is not leviable to such project. Hence, the ratio of the above judgment is directly applicable in the present case. 12. As per our above discussion and finding which gets support of above cited judgments, the impugned order is clearly not sustainable, hence the same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ousing Corporation Ltd. case came up before the Tribunal in the matter of S. Kadirvel (supra). In that stay order, the bench held as under :- 4. After considering the submissions, we have found prima facie case for the appellant inasmuch as it is not in dispute that the houses constructed by the Tamil Nadu Police Housing Corporation Ltd., are owned by the State Government and were allotted to police personnel by the Government. The Police Housing Corporation appears to have worked as an extended arm of the Government. Some of the decisions cited by the learned counsel are apparently supportive of his point that the houses that were constructed should be constructed to be in the personal use of the State Government in this view of the matter, we grant waiver and stay against the impugned demand and connected penalties. It can be seen that the issue involved in the case in S Kadirvel vs. CCE. Tiruchirapalli as was before the South Zonal Bench, Chennai is the same, hence, respectively following view already taken by the bench, we hold that the appellant has made out a case for the complete waiver of the pre-deposit of the amounts involved. Application for the waiver of pre-depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 relevant. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Corporation under Jawaharlal Nehru National Urban Renewal Mission (JnNRUM) We find that the issue of levy of service tax on the construction service in respect of above categories have been categorically held as non taxable. Relevant judgments are reproduced below. (a) In the case of Jethanand Arjundas Sons (supra), the Tribunal held as under: 7. After hearing both sides, we find that the activity of constructing houses for slum people under the government schemes is not taxable under Construction of Complex Services/ Works Contract/ CICS as it is intended for personal use. The issue is no longer res integra as squarely covered by Tribunal decision in the case of CCE ST vs Ganesh Yadav (Supra). As regards services to SEZ we find that this issue is also covered by the decision of the Tribunal in the case of Reliance Port and Terminals Ltd. Vs CCE ST (Supra). Regarding construction of stadium we find that identical issue has been decided by the Tribunal in favour of the assessee in the case of B. G. Shirke Construction Technology Put Ltd. Vs CCE (Supra). The construction of Vishwavidyalay for M. P. Laghu Udyog is also for public welfare and not for commercial pur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... states Limited v. C.C.E., Bangalore, 2015 (40) S.T.R. 815 wherein it was held that the construction of residential complex for ITC (in that case) intended to provide accommodation built for own employees, activity was covered by definition of personal use in Explanation to Section 65(91A) of Finance Act, 1994. Hence, the assessee s activity falls under exclusion of that Section and as such is excluded from levy of Service Tax. 10. In the present case, the quarters/residential complexes were got constructed by the AMC and AUDA for urban poor people for their residential use, the same amounts to personal use . The confirmation of demand qua these services by the Commissioner is therefore not sustainable. 11 . We also find that on the identical facts and issue in the matter of Santosh Katiyar Vs. Commissioner of Central Excise, Bhopal 2017(3)GSTL 203 the Delhi Tribunal held that :- 4 . From the record, it appears that during the period under consideration, the appellant neither took credit nor paid any Service Tax on the impugned services. The department is of the view that the said services are subject to service tax as per Chapter 5 of the Finance Act, 1994. But th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the present case. 12 . As per our above discussion and finding which gets support of above cited judgments, the impugned order is clearly not sustainable, hence the same is set aside. The appeal is allowed with consequential relief, if any arise, in accordance with law. 5. As regards the service provided by the appellant to GSPHCL, the issue has been considered in the following judgments. (a) In the case of M/s. Sima Engineering Constructions, S. Rajangam, T.M. Saravanan, M/s. Marimuthu Gounder Sons (supra), the Tribunal held as under:- 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 details of the period involved in these appeal is furnished by appellant as given in the table below: Appeal No. Appellant Period Involved ST/438/2011 Sima Engineering Constructions 16.6.2005 to 31.3.2007 ST/439/2011 S.Rajangam 16.6.2005 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tended for use as a place of residence; 7 . 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 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty 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 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 doubt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) projects; (Explanation to Section 65 (105) (zzzza) of Finance Act, 1994) 4.2 The definition of residential complex 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 f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-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 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-contractors have 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e employees of the Income Tax department. He drew our attention to the definition of the construction of complex services given under the clause (30a) of Section 65 to submit that personal use, according to the definition includes permitting 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, it cannot be said that CPWD can be equated with NBCC which is a Public Sector under taking. It is also well settled that Public Sector undertakings are not considered as Govt., departments and also cannot be considered as STATE . Further, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued on 4-10-2007 whereas, the service tax was payable for the period from 16-6- 2005 to 30-7-2007 and therefore, a portion of the demand is time barred. Even if a view 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 bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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