2018 (10) TMI 649 - AT - Service Tax

Construction of residential units - constructions not meant for sale but for making them available to the weaker of the society - Held that - The issue is already decided by this Tribunal through final order in the case of Commissioner of Customs, C. EX. & S.T., Allahabad vs. Ganesh Yadav 2017 (5) TMI 1251 - CESTAT ALLAHABAD , where it was held that The activity for constructing houses by the appellant for economically weaker section under works allotted by the Varanasi Development Authority under the scheme of Government of U.P., the activities is neither taxable under works contract services nor under Construction of Complex/Commercial or Industrial Construction Services - demand set aside. Construction of residential complex where the residential complex was constructed on the land owned by the builder and the sale was effected before 31.03.2010 i.e., before the explanation was inserted to the definition of residential complex services - Construction of Road, drainage and sever line, which are exempted - Held that - The matter should be remanded to the Original Authority with direction to examine the leviability of service tax. Appeal allowed by way of remand.

Summary

Issues:
1. Confirmation of demand of Service Tax and imposition of penalties.
2. Applicability of Service Tax on construction activities.
3. Interpretation of residential complex services definition.
4. Exemption for construction of road, drainage, and sewer line.

The judgment by the Appellate Tribunal CESTAT ALLAHABAD involved a case where the appellant, a builder registered as a contractor for Civil Works, undertook construction work for Kanpur Development Authority. The Original Authority confirmed a demand of Service Tax amounting to &8377; 90,12,660/- and imposed penalties. The appellant argued that part of the confirmed tax was related to the construction of residential units under a specific scheme for the weaker section of society, which had been previously adjudicated upon by the Tribunal. The remaining demand was for activities including the construction of a residential complex and infrastructure like roads, drainage, and sewer lines. The Tribunal noted the need for a reexamination of the leviability of service tax in light of previous decisions and the applicable definitions at the time of the transactions. The matter was remanded to the Original Authority for a reasoned decision considering the Tribunal's directions, ensuring the appellant's right to a hearing, and keeping all issues open.

The Tribunal, comprising Mrs. Archana Wadhwa, Member (Judicial) and Mr. Anil G. Shakkarwar, Member (Technical), heard the Stay Petition and proceeded to finalize the appeal after waiving the pre-deposit requirement. Both parties were represented during the proceedings. The appellant's Chartered Accountant and the Respondent's Superintendent appeared before the Tribunal. The Tribunal acknowledged the arguments presented by both sides and emphasized the necessity to review the applicability of service tax, particularly concerning the construction of residential units and infrastructure projects. The decision to remand the matter to the Original Authority was made to ensure a thorough examination of the issues in accordance with the Tribunal's previous rulings and the relevant legal provisions.

The key focus of the judgment was on the correct interpretation of the definition of residential complex services and the exemption criteria for specific construction activities. The Tribunal's decision to remand the case highlighted the importance of considering past precedents and the legal framework applicable at the time of the transactions in question. By setting aside the impugned order and providing clear directions to the Original Authority, the Tribunal aimed to facilitate a fair and comprehensive assessment of the service tax liability, ensuring procedural fairness and adherence to legal principles. The judgment underscored the significance of a reasoned decision by the Original Authority, with due consideration given to all relevant aspects of the case.

In conclusion, the Tribunal allowed the appeal by remanding the case for further examination, thereby disposing of the Stay Petition. The detailed analysis and directions provided in the judgment reflected a commitment to upholding legal principles, ensuring a fair and thorough review of the issues raised by the parties. The decision to keep all issues open signified the Tribunal's intent to address the matter comprehensively and in accordance with established legal standards.