9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2013 (8) TMI 262 - AT - Service TaxResidential Complex Section 65(91a) whether Construction of Complex Service is chargeable to service tax Held that - The houses that were constructed should be considered to be in the personal use of the State Government relying upon the judgement of Khurana Engineering Ltd. Vs CCE Ahmedabad (2010 (11) TMI 81 - CESTAT AHMEDABAD)- the houses constructed 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. Waiver of pre- deposit court allowed the waiver of pre deposit and granted the stay application decided in the favour of the assessee.
Issues:
1. Whether the construction activity by a corporation wholly owned by the State Government for police personnel quarters is chargeable to service tax. Analysis: The judgment pertains to an application seeking waiver and stay in relation to a service tax demand of Rs.7,61,054 imposed on the appellant for the period from 16.06.2005 to 31.08.2007, along with connected penalties. The demand is under the category of "Construction of Complex Service" for payments received by the appellant from a corporation wholly owned by the Tamil Nadu State Government for constructing police personnel quarters. The constructed quarters are owned by the State Government and allocated to eligible police personnel. The key contention revolves around whether this activity is subject to service tax under the definition of "residential complex" in Section 65(91a) of the Finance Act'94. The appellant argues that since the corporation is wholly owned by the State Government, the Government is the service recipient, and hence, the construction for government employees should not be taxed under the Finance Act, 1994. The appellant cites precedents such as Khurana Engineering Ltd. and East Coast Constructions & Industries Ltd. to support this stance. Additionally, reference is made to a case involving Tamil Nadu Small Industries Corporation Ltd. to assert that goods manufactured by a corporation wholly owned by the State Government were treated as belonging to the State Government for taxation purposes. On the other hand, the DC(AR) opposes the stay application, emphasizing that the Police Housing Corporation is a distinct legal entity separate from the State Government, thereby challenging the appellant's argument regarding service tax liability. However, upon evaluation, the tribunal finds a prima facie case in favor of the appellant. It is acknowledged that the houses constructed by the corporation are owned by the State Government and allocated to police personnel, indicating a close association between the corporation and the Government. The tribunal notes that decisions cited by the appellant support the notion that the constructed houses should be deemed for the personal use of the State Government. Consequently, the tribunal grants waiver and stay against the contested demand and associated penalties.
|
