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2018 (5) TMI 405 - AT - Service TaxConstruction of Residential Complex Service - period from 16.6.2005 to 31.12.2007 - whether construction of quarters for police personnel would fall within the taxable service of construction of complex service u/s 65(30a) r/w section 65(105)(zzzh) of Finance Act, 1994? - Held that - part of the demand is for the period prior to 1.6.2007. By applying the decision in the case of Larsen & Toubro 2015 (8) TMI 749 - SUPREME COURT , the demand for the period prior to 1.6.207 is not sustainable and requires to be set aside. The appellants have entered into an agreement with TNPHCL for providing services in relation to construction of residential complex. However, these are meant for use of police personnel - similar issue decided in the case of Nitesh Estates Vs. Commissioner of Central Excise 2015 (11) TMI 219 - CESTAT BANGALORE , where it was held that If the land owner enters into a contract with a promoter/builder/developer who himself provided service of design, planning and construction and if the property is used for personal use then such activity would not be subject to service tax. The levy of service tax cannot sustain. Appeal allowed - decided in favor of appellant.
Issues:
- Whether construction of quarters for police personnel falls within the taxable service of construction of complex service under the Finance Act, 1994. Analysis: The appellant, engaged in executing works contracts for the Tamil Nadu Police Housing Corporation Ltd., received a show cause notice proposing service tax demand for the period from 16.6.2005 to 31.12.2007 under the category of 'Construction of Residential Complex Service.' The appellant argued that the construction of quarters for police personnel, as awarded by the Government of Tamil Nadu, falls outside the definition of residential complex as it is meant for personal use by the police personnel, and there is no profit motive or commercial renting involved. The appellant relied on various legal precedents to support their argument, including decisions by the Hon'ble Supreme Court and previous Tribunal cases. For the period prior to 1.6.2007, the Tribunal held that the demand is not sustainable based on the decision in the case of Larsen & Toubro Ltd. For the period after 1.6.2007, the Tribunal analyzed the definition of residential complex under the Finance Act, 1994, and considered previous Tribunal decisions in similar cases. The Tribunal referred to the definition of residential complex and the exclusion clause for construction intended for personal use, which includes permitting the complex for use as residence by another person. Citing previous Tribunal decisions, the Tribunal concluded that the construction of quarters for police personnel, intended for personal use, does not attract service tax liability. The Tribunal's decision was based on the interpretation of the legal provisions, definitions, and precedents in similar cases. The Tribunal found that the facts of the case aligned with previous decisions regarding construction activities meant for personal use, leading to the conclusion that the levy of service tax cannot be sustained. As a result, the impugned orders were set aside, and the appeals were allowed with consequential reliefs, if any.
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