2018 (6) TMI 803 - AT - Service Tax

Construction of complex Service - contention of the appellant was that each residential unit being a standalone unit and there will be no building or buildings constructed by them having more than 12 units/flats they do not fall under the taxable category of construction of complex service - whether service tax under the category construction of complex as defined under Section 65 (30) (a) readwith Section 65 (105) (zzzh) readwith Section 65 (91a) of the Finance Act, 1994 has been rightly demanded? Held that - The issue herein is squarely covered in favour of the appellant by the ruling of Hon ble Supreme Court in the case of Macro Marvel projects Ltd. 2008 (9) TMI 80 - CESTAT, CHENNAI , where it was held that service tax under the category construction of complex is leviable only in case if construction of a building or buildings having more than 12 units - demand do not sustain - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Whether service tax under the category construction of complex has been rightly demanded.

Analysis:
The issue in this appeal revolved around the demand for service tax under the category of construction of complex as defined under various sections of the Finance Act, 1994. The appellant, engaged in civil and commercial construction work, was asked to submit various documents related to their construction activities for the period in dispute, 2011-2012. The Revenue contended that the appellant had not provided specific information regarding their contracts, leading to suspicion of evasion of service tax. The Revenue proposed a significant amount as service tax along with interest and penalties based on the appellant's turnover. The show cause notice was adjudicated by the Commissioner, who confirmed a reduced amount of service tax along with penalties.

2. Whether the appellant falls under the taxable category of construction of complex service.

The Commissioner held that the appellant was liable to pay service tax under the construction of complex service category. The Commissioner clarified that the legal requirement for a building or buildings to be considered a residential complex is having more than 12 residential units, irrespective of whether they are standalone units or part of a larger structure with common facilities. The Commissioner specifically mentioned that if there are more than 12 individual houses with common facilities or more than 12 flats in a multi-story building with shared amenities, they would constitute a residential complex.

3. Whether the construction of major drain and disposal of rainwater is taxable under the construction of complex service.

Part of the demand related to the construction of a major drain and disposal of rainwater at a housing scheme awarded by Rajasthan Housing Board. The Commissioner classified this construction under the taxable category of construction of complex service, stating that such infrastructure is an integral part of a residential complex and therefore taxable. However, the appellant argued that this work did not qualify as part of a residential complex or a facility for residents, and the demand was not justified. The appellant cited a previous order by the Commissioner in their favor regarding the taxability of rainwater drains.

In conclusion, the appellate tribunal ruled in favor of the appellant, citing precedent set by the Hon'ble Supreme Court in a similar case. The tribunal allowed the appeal, setting aside the impugned order and granting the appellant any consequential benefits in accordance with the law.