2018 (7) TMI 1385 - AT - Service Tax

Construction of Complex Service - construction of individual houses - appellant carried out the work orders for the construction of ten as well as twelve housing units in different parts of Pratap Nagar colony - Revenue has taken the view that these residential units have been constructed as part and parcel of a massive colony. Held that - The Tribunal in the case of M/S. LEKH RAM ARYA VERSUS CCE, JAIPUR 2017 (12) TMI 838 - CESTAT NEW DELHI on similar issue has held that in the absence of any positive evidence to the effect that these units share common facilities, the Service Tax liability cannot be upheld - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Whether the construction of individual houses for the Rajasthan Housing Board falls under the definition of "Construction of Complex Service" for service tax liability.
- Whether the appellant's construction of ten HIG and twelve MIG houses constitutes a residential complex with common facilities as mandated by the tax entry.

Analysis:
1. Issue 1 - Construction of Individual Houses:
The appellant challenged the order for service tax payment, arguing that the construction of ten HIG and twelve MIG houses for the Rajasthan Housing Board does not qualify as "Construction of Complex Service." They contended that each building should have more than twelve residential units to fall under this definition. The lower authorities considered these houses as part of a residential complex due to common facilities. However, the Tribunal noted that the Revenue failed to provide specific evidence regarding the existence of such facilities in the residential complex where the construction took place.

2. Issue 2 - Residential Complex Definition:
The appellant emphasized a previous Tribunal decision in their favor, where it was held that construction below twelve houses cannot be taxed under the "Construction of Complex Service" unless there is evidence of common facilities. The Tribunal reiterated that to tax under this category, the construction must be part of a residential complex with more than twelve dwelling units sharing common facilities. In this case, the Tribunal found a lack of evidence supporting the categorization of the appellant's construction as part of a residential complex as defined by the tax entry.

3. Judicial Precedents and Decision:
Referring to earlier Tribunal judgments, the current Tribunal decision aligned with the consistent interpretation that individual houses should not be taxed under the "Construction of Complex Service" unless they are part of a residential complex with specific common facilities and layout approvals. The Tribunal emphasized the necessity of clear evidence to establish the presence of common facilities within an approved layout to warrant taxation under this category. Based on the lack of such evidence and following the precedent, the impugned order was set aside, and the appeal was allowed.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the service tax liability on the construction of individual houses for the Rajasthan Housing Board due to the absence of concrete evidence establishing them as part of a residential complex with common facilities as required by the tax entry.