2016 (11) TMI 581 - AT - Service Tax

Levy of tax - construction of residential complex - The grounds of appeal, inter alia, including that the certificate dated 04.12.2010 issued by Ghaziabad Development Authority to the effect that the complex is being constructed by respondent to this appeal are 54 staff quarters does not clearly indicate as to for whom Ghaziabad Development Authority is getting them constructed whether for themselves or for any other agency. Therefore, said certificate is not concrete evidence. Further, the Revenue has raised another ground that in the case of clarification issued by CBEC dated 24.05.2010, Government of India was service receiver and Ghaziabad Development Authority is not government and the staff quarters are whether for government staff or not on that there is no factual evidence.

Summary

Issues:
1. Whether the construction of 54 staff quarters by the respondent for Ghaziabad Development Authority qualifies as a construction of residential complex for the purpose of service tax liability.
2. Whether the certificate issued by the Ghaziabad Development Authority and the clarification by CBEC support the respondent's position that the construction of staff quarters is not liable for service tax.

Analysis:
1. The appeal was filed by the Revenue against the Order-in-Appeal dated 26.11.2014, concerning the demand of service tax amounting to &8377; 17,16927/- for the construction of 54 staff quarters by the respondent. The Revenue contended that the construction satisfied the definition of a residential complex, thus attracting service tax liability. However, the Ld. Commissioner (Appeal) held that the construction of staff quarters did not fall under the definition of a residential complex under Section 65(91a) of the Finance Act, 1994. The Ld. Commissioner relied on a certificate from Ghaziabad Development Authority and a clarification by CBEC to support this position, ultimately setting aside the demand for service tax.

2. The grounds of appeal raised by the Revenue included questioning the validity of the certificate issued by Ghaziabad Development Authority and the applicability of the CBEC clarification. The Revenue argued that the certificate did not clearly specify the purpose of the construction and raised doubts about the status of the service receiver. However, the respondent argued that the certificate, along with the CBEC clarification, provided sufficient evidence that the construction was for staff quarters and not liable for service tax. The Tribunal, after considering the arguments, upheld the Order-in-Appeal dated 26.11.2014, stating that the Revenue failed to establish any grounds to challenge the findings. Consequently, the appeal filed by the Revenue was rejected.

In conclusion, the Tribunal ruled in favor of the respondent, holding that the construction of staff quarters for Ghaziabad Development Authority did not attract service tax liability as it did not qualify as a residential complex under the relevant provisions. The decision was based on the interpretation of the statutory definition and supporting documentation, emphasizing the importance of concrete evidence in determining service tax obligations.