2018 (9) TMI 1660 - AT - Service Tax

Construction of Residential Complex Service - it was alleged that appellant had failed to file proper statutory half-yearly ST-3 returns with correct taxable value - demand alongwith interest and penalties - Held that - The very same issue decided in the case of Ramalingam Construction Co.(P).Ltd. Vs. Commissioner of Central Excise& Service Tax, Salem 2018 (7) TMI 620 - CESTAT CHENNAI , where it was held that The periods of demand in all these disputes related to construction of residential complexes for KHB etc. spans from 2005 to 2015. There are merit in the appellant s contention that demands on this score prior to 1.6.2007 is liable to be set aside in view of the decision of the Hon ble Apex Court in CCE & CC Kerala Vs Larsen & Toubro Ltd. 2015 (8) TMI 749 - SUPREME COURT . For the period subsequent to 1.6.2007, In a number of decisions, the higher appellate forums have consistently held that there is no liability to pay service tax for the reason that the complex so constructed are intended for personal use which is excluded in the definition of construction of residential complex. Demand set aside - appeal dismissed - decided against Revenue.

Summary

Issues:
Challenge to Commissioner's Order setting aside demand for service tax on construction of residential quarters.

Analysis:
1. Issue of Demand for Service Tax: The appellant had constructed residential complexes for CPWD and discharged service tax. The AA issued a Show Cause Notice for not filing proper ST-3 returns, confirming the demand in the Order-in-Original. The Commissioner (Appeals) allowed the appeal based on CBEC clarification and judicial precedents.

2. Legal Precedents and Interpretation: The appellant relied on the decision in Ramalingam Construction Co. case and the Ahmedabad Bench judgment in Khurana Engineering Ltd. The Tribunal in Ramalingam Construction Co. case set aside the demand for the period before 1.6.2007 and held that complexes intended for personal use are not liable for service tax.

3. Exemption and Personal Use Interpretation: Various decisions highlighted that constructions for government employees or weaker sections, under government schemes like JNNRUM, were not taxable. The Tribunal consistently held that constructions for personal use or residential purposes fell under exemptions, even post the negative list regime from 1.7.2012.

4. Stare Decisis Principle: The Tribunal, following the principle of stare decisis, upheld the Commissioner's decision based on previous rulings and interpretations. The Tribunal found the Commissioner's decision justified and dismissed the Department's appeal, setting aside the demands for service tax on construction of residential complexes.

In conclusion, the Tribunal upheld the Commissioner's decision to set aside the demand for service tax on the construction of residential quarters based on legal precedents, exemptions for personal use constructions, and consistent judicial interpretations. The principle of stare decisis played a crucial role in affirming the Commissioner's order, leading to the dismissal of the Department's appeal.