2019 (1) TMI 1117 - AT - Service Tax

Classification of services - Construction of Residential Complex Service or not - contention of appellant is that the issue raised was defended by them on the basis of definition of Residential Complex Service and in respect of Bapu Dham Complex, there were no common facilities and therefore, the activity was not covered by the definition of Construction of Residential Complex Service - Held that - An identical issue was decided by this Tribunal in the case of Rajeshwar Builders Versus Commissioner of Central Excise, Ghaziabad 2018 (8) TMI 821 - CESTAT ALLAHABAD , where it was 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. Since there is no positive evidence provided by Revenue to establish that there were common facilities such as Park, Lift, Community Hall, etc., the impugned order is set aside - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Construction of Residential Complex Service under Service Tax.

Analysis:
The case involved a dispute regarding the demand of Service Tax amounting to around ?18 lakh for the construction of houses in a specific scheme. The appellant contended that the construction did not fall under the definition of Residential Complex Service as there were no common facilities like Park, Lift, Parking Space, Community Hall, Common Water Supply, or Effluent Treatment System in the complex. The appellant relied on a previous case decided by the Tribunal to support their argument. The Tribunal referred to the definition of a residential complex under Clause (91a) of Section 65 of the Finance Act, 194 and emphasized the requirement of common facilities and a common area for a building to qualify as a residential complex. The Tribunal noted that the Revenue failed to establish the presence of such common facilities in the case at hand, leading to the conclusion that the construction did not constitute a residential complex service.

In line with the precedent set by the Tribunal and the absence of evidence regarding common facilities, the impugned order was set aside, and the appeal was allowed in favor of the appellant. The Tribunal highlighted the importance of fulfilling the criteria outlined in the definition of a residential complex to determine the applicability of Service Tax. Consequently, the appellant was granted consequential relief based on the lack of proof regarding the existence of common facilities like Park, Lift, and Community Hall in the construction project.