2016 (6) TMI 1284 - AT - Service Tax

Liability of service tax - construction of residential complex for the use of Government of India - Held that - There is no dispute that the construction was made on behalf of the President of India which was not a commercial property. That was not even made for identified person for his personal use. That was made residential complex of the BSF and not being constructed for commercial use but meant for the use of the Government of India that is out of the scope of taxation under the Finance Act 1994 - service not taxable - appeal allowed - decided in favor of appellant.

Summary

Issues:
Taxability of service provided in constructing a residential complex for the Government of India under section 65(105)(zzzh) of Finance Act, 1994.

Analysis:

1. Issue: Taxability of service provided for constructing a residential complex for the Government of India under specific sections of the Finance Act, 1994.

- The appellant constructed a residential complex for the Government of India through a contract with CPWD. The service provided was sought to be taxed under relevant sections of the Finance Act, 1994.

- The appellant argued that previous Tribunal decisions established that construction made for the Government of India, not for commercial or personal use, does not attract service tax. Cited cases include Khurana Engineering Ltd. Vs. Commissioner of Central Excise, Ahmedabad and others.

- The Revenue contended that the building, used by BSF employees, should not be considered for personal use, thus taxable.

- The Tribunal noted that the construction was not commercial, not for personal use, but for the Government of India. Previous decisions supported this view, leading to the conclusion that such construction falls outside the scope of taxation under the Finance Act, 1994.

2. Decision:

- After hearing both sides and examining the records, the Tribunal found that the construction was indeed for the use of the Government of India, not for commercial purposes or personal use.

- Given the consistent judicial interpretation in previous cases cited by the appellant, the Tribunal upheld that the construction of a residential complex for the BSF, meant for the Government of India, does not attract service tax.

- Following judicial discipline and the established legal principles, the Tribunal allowed the appeal without further deliberation, emphasizing the non-taxable nature of the service provided in this case.

3. Conclusion:

- The judgment by the Appellate Tribunal CESTAT Chennai clarified the taxability of services provided in constructing a residential complex for the Government of India under relevant sections of the Finance Act, 1994. The decision highlighted the importance of previous judicial interpretations and established that such constructions, not for commercial or personal use but for government entities, do not fall within the scope of service tax, providing clarity on the taxation aspect in similar scenarios.