2014 (8) TMI 982 - AT - Service Tax

Waiver of pre deposit - construction of complex and works contract services - Held that - From the provisions of Section 65 and on general interpretative principles it is clear that where a word or an expression is defined in an enactment such definition, unless a contrary intention is evident would govern the meaning of an expression wherever it occurs in the same enactment. Residential complex is defined in Section 65(91a) and this definition would govern the scope of the expression residential complex under Section 65(105)(zzzza) as well. - In view of the decision of the Tribunal in Macro Marvel Projects and as the petitioner has constructed EWS, LIG and MIG houses as stand alone units for the Rajasthan Housing Board, it cannot be, prima facie, held that the petitioner had provided construction of residential complex service. We, therefore grant waiver of pre-deposit in full and stay all further proceedings for realisation of the adjudicated liability, pending disposal of the appeal - Stay granted.

Summary

Issues:
1. Service tax liability on construction of complex and works contract services.
2. Interpretation of the definition of "residential complex" under Section 65(91a) of the Finance Act, 1994.
3. Applicability of the definition of "residential complex" to construction of residential complex under works contract services.

Analysis:
The appeal was filed against an adjudication order confirming a substantial service tax liability on the petitioner for providing construction of complex and works contract services. The petitioner argued that the houses constructed were independent units and did not fall under the definition of residential complex as per Section 65(30a) of the Finance Act, 1994. Reference was made to the decision in Macro Marvel Projects Ltd. v. CST, Chennai, which emphasized that to be considered a residential complex, a building should have more than twelve residential units. However, the adjudicating authority did not accept this argument, leading to the impugned order.

The Tribunal, in the case of Macro Marvel Projects, clarified the scope of "construction of complex" service under Section 65(30a) in conjunction with the definition of "residential complex" in Section 65(91a). It held that individual residential houses do not fall within the definition of residential complex unless they comprise buildings with more than twelve residential units. This interpretation was crucial in determining the applicability of service tax liability on the petitioner's construction activities.

The Revenue contended that the definition of "residential complex" under Section 65(91a) should not be applied to construction of residential complexes under works contract services as per Section 65(105)(zzzza)(1c) of the Finance Act, 1994. However, the Tribunal found this argument to be misconceived. It emphasized that when a term is defined in an enactment, such definition governs the meaning of the term wherever it appears in the same enactment. Therefore, the definition of residential complex in Section 65(91a) was deemed applicable to works contract services as well.

Based on the analysis and the precedent set by the Macro Marvel Projects case, the Tribunal ruled in favor of the petitioner. Since the petitioner had constructed EWS, LIG, and MIG houses as separate units, not constituting a residential complex as per the defined criteria, it was held that the petitioner did not provide construction of residential complex service. Consequently, the Tribunal granted a waiver of pre-deposit and stayed further proceedings for the realization of the adjudicated liability pending the appeal's disposal.