2016 (9) TMI 845 - AT - Service Tax

Demand alongwith interest and penalties - Real Estate Agent Service - development of the plots and carry out the jobs/functions summarised in the agreement - whether service charges received on the works referred to in the agreement, attract service tax under the category of construction services of residential complex service - Held that - it is found that in the Alokik Township Corporation vs. Commissioner of Central Excise & Service Tax, Jaipur-I 2014 (7) TMI 1017 - CESTAT NEW DELHI involving similar facts and circumstances, the Tribunal taking into consideration the development work undertaken by the appellant therein observed that such development of plots would not fall within the scope of the construction of complex services. Therefore, in view of the same, we do not see any reason to record a different finding, as the facts are identical in both the cases. In the result, the impugned order is set-aside. - Decided in favour of appellant with consequential relief

Summary

Issues: Appeal against order-in-appeal regarding service tax on construction services of residential complex service.

Analysis:
1. Issue of Classification of Service: The appellant, a real estate agent, was charged with service tax under the category of construction services of residential complex service for the period from October 2005 to March 2006. The appellant contended that the development of plots by constructing internal roads and facilities did not fall under the construction of residential complex service. They cited a previous Tribunal case, Alokik Township Corporation vs. Commissioner of Central Excise & Service Tax, to support their argument. The Tribunal in the previous case had observed that the development work undertaken by the appellant did not fall within the scope of construction of complex services. The Tribunal emphasized that the appellant's activities involved developing land for a township, which included various infrastructure works but not construction of residential complexes. The Tribunal concluded that the service tax demand under the construction of complex service was not sustainable. The Tribunal in the present case relied on this precedent and set aside the impugned order, allowing the appeal with consequential relief as per law.

2. Legal Findings and Precedent: The Tribunal analyzed the scope of work undertaken by the appellant, which included levelling of land, demarcation of plots, construction of roads, boundary walls, water harvesting systems, and other infrastructure works for a township. The Tribunal noted that the appellant did not construct residential complexes but focused on developing land for a township. By referring to the previous judgment and the specific activities undertaken by the appellant, the Tribunal determined that the appellant's services did not fall under the definition of construction of complex service or works contract service. Therefore, the Tribunal set aside the demand for service tax and penalties imposed on the appellant, aligning its decision with the precedent established in a similar case.

3. Decision and Conclusion: After considering the arguments presented by both parties and examining the facts of the case, the Tribunal found that the appellant's activities were akin to land development for a township rather than construction of residential complexes. Relying on the precedent set in a similar case, the Tribunal concluded that the service tax demand on the appellant was not justified. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief as per the law. The Tribunal's decision was based on a thorough analysis of the appellant's activities and the legal precedent established in a comparable case, ensuring consistency and fairness in the application of tax laws related to construction services of residential complex service.