2020 (2) TMI 291 - AT - Service Tax

Non-payment of service tax - services of construction of residential units (police quarters to Tamil Nadu Police Housing Corporation) - HELD THAT - The issue whether the construction of residential units for Tamil Nadu Police Housing Corporation would be subject to levy of service tax was considered by the Tribunal in the case of N. RANGASAMY CO. VERSUS COMMISSIONER OF CENTRAL EXCISE, SALEM 2019 (2) TMI 690 - CESTAT CHENNAI where it was held that construction of such quarters for police personnel will fall under exclusion category and would not be exigible to service tax. Appeal allowed - decided in favor of appellant.

Summary

Issues:
- Applicability of service tax on construction of residential units for Tamil Nadu Police Housing Corporation.

Analysis:

The case involved the issue of whether service tax was applicable to the construction of residential units for the Tamil Nadu Police Housing Corporation. The appellant had not paid service tax on the consideration received for the construction services provided. The original authority, after due process, confirmed the demand for service tax, interest, and imposed a penalty. The Commissioner (Appeals) upheld this decision, leading to the appeal before the Tribunal.

During the proceedings, the appellant's counsel referred to a previous decision by the Tribunal in the case of N. Rangasamy & Co. Vs CCE Salem, where it was held that the construction of residential units for a similar entity was not subject to service tax. The appellant argued that this precedent should apply in their case as well.

On the other hand, the respondent's representative supported the findings of the impugned order, maintaining that service tax should be levied on the construction services provided to the Tamil Nadu Police Housing Corporation.

After considering the arguments from both sides and examining the records, the Tribunal found that the issue at hand was already settled by the Tribunal's previous decision in the case cited by the appellant. Therefore, the Tribunal concluded that the impugned order could not be sustained and was set aside. The appeal was allowed, with any consequential relief to be provided as per the law.

In conclusion, the Tribunal's decision was based on the precedent set by a previous case, determining that service tax was not applicable to the construction of residential units for the Tamil Nadu Police Housing Corporation, leading to the allowance of the appeal and the setting aside of the original order.