2019 (1) TMI 1593 - AT - Service Tax

Residential Complex Service - services provided by the appellants for construction of Madhuban Bapudham Yojana for Ghaziabad Development Authority - HELD THAT - Revenue has not brought any positive evidence on record to establish that there were any common facilities such as park, lift, parking space, community hall or affluent treatment system - the decision in the case of Rajeshwar Builders v. Commissioner of Central Excise, Ghaziabaed 2018 (8) TMI 821 - CESTAT ALLAHABAD where it was held that in respect of identical issue where Madhuvan Bapudham Scheme residential units were constructed that since the said activity did not satisfy the definition of residential complex inasmuch as there were no common facilities such as park, lift, community hall etc., the constructed premises did not satisfy the definition of residential complex - Service Tax demand of around ₹ 31.00 lakhs on account of same along with interest and penalty is not sustainable and the same is set aside. Services provided for establishment of an electrical sub-station - HELD THAT - The same is exempted through Notification No.45/2010 dated 20.07.2010 and Notification No.11/2010-ST dated 27.02.2010 - Service Tax demand of around ₹ 20.00 Lakhs and around ₹ 41,000/- confirmed in respect of services provided for establishment of electrical sub-station does not sustain - demand set aside. Nature of activity - service or supply of goods? - certain purchase orders received by the appellant in respect of supplies to stadium where the stadium was the property of Ghaziabad Development Authority - HELD THAT - The appellant if provides services to such organization, they are not services to commercial organization and therefore not subjected to Service - demand set aside. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Demand of Service Tax for construction services
2. Service Tax demand for establishment of an electrical sub-station
3. Dispute regarding services or goods supplied for stadium construction

Issue 1: Demand of Service Tax for construction services
The first issue pertains to the demand of Service Tax for services provided by the appellants in the construction of Madhuban Bapudham Yojana for Ghaziabad Development Authority. The department contended that the activity fell under 'Residential Complex Service'. However, the appellants argued that the constructed premises did not satisfy the definition of a residential complex as there were no common facilities like park, lift, community hall, etc. The Tribunal referred to a precedent case and noted that the Revenue failed to provide evidence of common facilities. Consequently, the Tribunal held that the Service Tax demand of approximately ?31.00 lakhs, along with interest and penalty, was not sustainable, and thus, set it aside.

Issue 2: Service Tax demand for establishment of an electrical sub-station
The second issue involves the services provided for the establishment of an electrical sub-station. Both parties agreed that these services were exempted under specific notifications. The Tribunal concurred and held that the Service Tax demand of around ?20.00 lakhs and ?41,000 confirmed for these services was not sustainable. Therefore, the Tribunal set aside the Service Tax demand along with interest and penalty in this regard.

Issue 3: Dispute regarding services or goods supplied for stadium construction
The third issue revolved around purchase orders received by the appellant for supplies to a stadium owned by Ghaziabad Development Authority. The dispute centered on whether the appellant provided services or only supplied goods. The Revenue contended that the appellant did not provide sufficient evidence to prove that they supplied goods only. However, the Tribunal referred to a previous Final Order and concluded that if the appellant provides services to an organization like Ghaziabad Development Authority, which operates under the State Govt., such services are not considered services to a commercial organization and are not subjected to Service Tax. Therefore, the Tribunal held that the demand of around ?64,000 in this regard, along with interest and penalty, was not sustainable. As a result, the impugned order was set aside, and the appeal was allowed.

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