2018 (8) TMI 821 - AT - Service Tax

Construction services - Construction of Residential of Complex Service - case of appellant is that the residential flats were constructed by them for weaker section of society for Ghaziabad Development Authority and same did not qualify to be residential complex service - Held that - To qualify to be a residential complex the building or buildings should have a common area and one or more facilities of services such as park, lift, parking space, community hall, water supply or effluent treatment system, located within a premises. Further perusal of show cause notice indicates that Revenue could not make out a case that there were any such common facilities. Thus, the appellant in the instant case did not provide construction of residential complex service - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Appeal against Order-in-Original regarding demand under different service categories.
2. Interpretation of the definition of "residential complex" under Section 65 of Finance Act, 1994.
3. Determination of whether the appellant provided construction of a residential complex service.

Analysis:
1. The appeal was filed against Order-in-Original No.14/COMM./ST/GZB/2013-14 dated 20.11.2013 by the Commissioner, Customs, Central Excise, and Service Tax, Ghaziabad. The appellant, engaged in construction activity, provided services to Ghaziabad Development Authority, leading to a demand of approximately &8377; 4.5 crores under various service categories. The Original Authority dropped demands under some categories but confirmed a demand of &8377; 49,76,800/- under the Construction of Residential Complex Service, imposing a penalty equal to the service tax amount. The appellant contested this demand, leading to the present appeal.

2. The definition of "residential complex" under Clause (91a) of Section 65 of the Finance Act, 1994 was crucial in this case. The definition includes buildings with more than twelve residential units, a common area, and specific facilities or services like park, lift, parking space, etc. The appellant argued that the residential flats constructed for weaker sections of society did not meet this definition as there were no common facilities like park, lift, parking, etc., required for a residential complex.

3. After considering the arguments and perusing the record, the Tribunal analyzed the definition of a residential complex. It was noted that for a building to qualify as a residential complex, it must have common areas and certain facilities or services as specified in the definition. The Tribunal found that the Revenue failed to establish the presence of such common facilities in the appellant's construction. Consequently, it was held that the appellant did not provide a construction of a residential complex service as per the defined criteria. Therefore, the impugned order was set aside, and the appeal was allowed.

This detailed analysis of the judgment highlights the issues involved, the legal arguments presented, and the Tribunal's decision based on the interpretation of relevant legal provisions.