TMI Blog2024 (1) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... pon by the department in the case of M/S MODI MODI CONSTRUCTIONS VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE SERVICE TAX, HYDERABAD - II [ 2019 (10) TMI 171 - CESTAT HYDERABAD] is held not applicable to the facts of the present case because in the said case an approach called Nilgiri Homes was being constructed by the service provider having all common facilities within the complex. Resultantly, it was held to be clarified as a residential complex. Similar is the fact for the case Isha Homes (I) Pvt. Ltd. Both these cases have different facts from the present one hence is distinguishable. This issue therefore decided in favour of the appellant s against the department. Whether the construction of railway platform and laying of railway track to ply toy train by the appellant for an amusement park is liable to service tax under Works Contract Service under Section 65(105) (zzzza) or excluded from its scope? - Onus to prove on appellant - HELD THAT:- The exclusion clause cannot be made applicable for the toy train installed in an amusement park for the public. Hence have no reason to differ from these findings of the adjudicating authority. The amusement park and an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in terms of Notification No 01/2006 dated 01.03.2006. Invocation of Extended period of limitation - onus on the department to produce evidence to prove a positive act - HELD THAT:- The non-payment of service tax is not intentional. The appellant had not even got himself registered due to the said bona fide belief. In light of the said belief the onus was of the department to produce evidence to prove a positive act on the part of the appellant that the evasion of duty was intentional or mala fide, but there is no such evidence - the present can be a case nothing more than that of negligence on the part of the appellant, extended period should not have been invoked by the department. The demand raised for providing Works Contract Service for laying the railway tracks and for constructing a drain is confirmed but for the normal period with the benefit of abatement at the rate of 67% in terms of Notification No. 01/2006. The demand under Construction of Residential Complex Service is also hereby set aside. The entire demand for the extended period is hereby set aside - Appeal allowed in part. - DR. RACHNA GUPTA, MEMBER (JUDICIAL) AND MR. P.V. SUBBA RAO, MEMBER (TECHN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. The said proposals has been confirmed vide the order under challenge. Being aggrieved the appellant is before this Tribunal. 2. We have heard Shri Vijai Kumar, learned Advocate for the appellant and Ms. Jaya Kumari, Authorized Representative for the department. 3. Learned counsel has submitted that construction of house/EWS quarters or under IHSDP scheme are not the services provided for construction of residential complex service as none of the four conditions specified in the definition of said taxable services are satisfied. Reliance has been placed upon the following decisions: (i) Macro Marvel Projects Ltd. Vs. Commr. of Service Tax, Chennai reported as 2008 (12) S.T.R. 603 (Tri.-Chennai) (ii) Baba Construction Pvt. Ltd. Vs. Commr. of C.Ex. S.T., Ghaziabad reported as 2018 (15) G.S.T.L. 345 (Tri.-All.) (iii) A.S. Sikarwar Vs. Commissioner of Central Excise, Indore reported as 2012 (28) S.T.R. 479 (Tri.-Del.) (iv) Hari Narain Khandelwal Vs. Commissioner of C.C.E. S.T. reported as 2017 (5) G.S.T.L. 277 (Tri.-Del.) 3.1 It is submitted that each house was an independent residential unit and hence is out of the scope of being called as resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s placed reliance upon the case of Modi Modi Constructions Vs. Commr. of Cus., C.Ex. S.T., Hyderabad II reported as 2021 (45) G.S.T.L. 398 (Tri.-Hyd.) and also on the decision of Isha Homes (I) Pvt. Ltd. Vs. Commissioner of Service Tax, Chennai reported as 2012 (25) STR 465 (Tri.- Chennai). 4.1 With respect to the laying of railway tracks, it is submitted that the intention of legislature is to exclude railway services which are received for transportation of goods and travelling by the passengers. The railway track in the present case was meant for the toy train installed for use of amusement of the public. Plain reading of the exclusion clause in the definition of Works Contract Service clarifies that laying of railway track in amusement park is not covered under the said exclusion clause meant for exemption of tax liability. No infirmity has been impressed upon when the demand with respect to construction of nallah/drain has been confirmed. It is finally submitted that not doubt all the projects executed by appellant were in the nature of work contract service, however, the appellant rightly been denied the benefit of composition scheme as provided under Works Contract ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 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 the clause (a) Personal use includes permitting the complex for the use a 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; 7.2 It is clear from the said definition that it should be comprising one or more buildings each having more than 12 residential units. Independent buildings having 12 or less than 12 residential units are thus out of the scope of this definition. Also residential unit which means a single house or a single abatement meant to be used as personal place of residence be out of scope of being called as complex if a unit irrespective several in numbers, do not have a common area or one or more of the common facilities as mentioned in the above definition. 7.3 There has been a change in the above definition w.e.f 01.07.2012. The said change has been discussed by this Tribunal in the case of M/s Lakhlan Qureshi Constructiion Company Vs. Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onomical weaker section in the state. The services were not commercial nor for industrial purposes but for discharge of the sovereign function of the said government. Hence we hold that impugned Works Contract Service/Construction of Residential Complex Service is not liable to tax. We draw our support from the decisions relied upon by the appellant. The decision relied upon by the department in the case of Modi Modi Constructions (supra) is held not applicable to the facts of the present case because in the said case an approach called Nilgiri Homes was being constructed by the service provider having all common facilities within the complex. Resultantly, it was held to be clarified as a residential complex. Similar is the fact for the case Isha Homes (I) Pvt. Ltd. Both these cases have different facts from the present one hence is distinguishable. This issue therefore decided in favour of the appellant s against the department. 8. Issue No.2 8.1 The activity of constructing platform and laying of railway track for plying of toy train is also held to be a Works Contract Service by adjudicating authority below. We have no reason to differ from those findings because ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t-assessee to prove that this activity of the government was not for commerce but there is no such evidence produced on record. Resultantly, we uphold the findings under this issue that the impugned activity was a taxable Works Contract Service. 9. Issue No. 3 9.1 The construction of drain system is also held to be Work Contract Service provided by the appellant under a contract as it was having all essential characteristic as that of property in goods, payment of VAT, using own material by the service provider and that the services were provided after 01.06.2007. In light of the definition of Works Contract Service in clause (ii) (a) (65) (105) (zzzza) of the Finance Act and the discussion under above issues. We do not find any reason to differ from those findings. Coming to the taxability about this particular service, we observe that services of constructing of drain system has been provided by the appellant to the State of Rajasthan under a government scheme called Jawaharlal Nehru National Urban Renewal Mission (JNNURM). The clause has already been referred under issue no. 2. Perusal makes it abundantly clear that the provision does not excluded construction of drai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 006 has wrongly been denied to the appellant under Works Contract (Composition Scheme for Payment of Service Tax) Rules, 2007 as was issued under Notification No. 32/2007-ST dated 22.05.2007, the composition was available subject to two conditions: (i) The provider of taxable services shall not take the Cenvat credit of duties paid. (ii) They have to exercise the option in respect of work contract prior to the payment of service tax in respect of said works contract. 10.2 As already observed above, question of violation of first condition does not at all arise. With regard to second condition, since the appellant had not registered itself under service tax regime under the belief that the services rendered by him are not subject to tax, the was no stage to exercise option. Resultantly, the appellant would have been held entitled for the benefit of composition scheme. However, the appellant cannot gain both the benefits i.e. of abatement as well as of composition for rendering Works Contrat Service. Since appellant is held entitled for abatement of 60% of tax amount on the amount received for rendering the Work Contract Services, composition scheme cannot simultaneously bee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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