2017 (12) TMI 838 - AT - Service Tax

Liability to tax - construction of complex service - Revenue entertained a view that these are part of a common residential complex and as such, liable to tax - Held that - It has been consistently held that to tax the appellant under construction of complex service , it is necessary to record that the construction are of residential complex of having 12 or more dwelling units or parts thereof. These complexes, should share common facilities, even if they are independent houses. Such categorical finding is required to satisfy the statutory provisions of Section 65(91a) of the Finance Act, 1994 - in the present case, the evidences are lacking - the impugned order fails to justify the demand. GTA service - demand of service tax - Held that - the appellants have hired the service of individual truck owners, who did not issue consignment notes. As such, these activities are not covered by tax liability under GTA service. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Tax liability under the category of "construction of complex service" for building less than 12 individual houses.
2. Recovery of amount under GTA service for services received.

Analysis:

Issue 1:
The case involved the tax liability of the appellants under the category of "construction of complex service" for building less than 12 individual houses. The Revenue asserted that the houses were part of a common residential complex and thus liable to tax. The Original Authority confirmed the tax liability and imposed penalties under the Finance Act, 1994. The appellant argued that the tax liability was confirmed without examining the applicability of the tax entry for residential complex service and that the construction of individual houses for the Housing Board did not necessarily make them part of a residential complex. The Tribunal emphasized the need for categorical evidence to establish that the houses were part of a residential complex with common facilities, as mandated by the statutory tax entry. It was noted that the impugned order lacked such evidence and relied on inferences, which was deemed unsustainable. Referring to a previous case, the Tribunal highlighted that mere sharing of common facilities like roads and parks does not automatically render individual houses taxable under the construction of complex service. The Tribunal concluded that the evidence presented was insufficient to justify the tax liability, setting aside the impugned order and allowing the appeal.

Issue 2:
The second issue pertained to the recovery of amount under GTA service for services received by the appellants from individual truck owners who did not issue consignment notes. The Tribunal held that such activities were not covered by tax liability under GTA service. Consequently, the impugned order was deemed unsustainable on this issue as well, leading to its setting aside and allowing the appeal.

In conclusion, the Tribunal found the impugned order unsustainable on both issues and set it aside, allowing the appeal of the appellants.