2023 (7) TMI 1021 - AT - Service Tax

Levy of Service tax - service of construction of residential complex for Gujarat State Police Housing Corporation - HELD THAT - The issue is no longer res-integra as in the various judgments which bear identical facts, this Tribunal has held that the construction of residential complex provided by the contractor to State Police Housing Corporation is not liable to service tax. The ratio of the decision of this Tribunal in the case of RIDDHI SIDDHI CONSTRUCTION VERSUS C.C.E. S.T. -VADODARA-II 2023 (5) TMI 340 - CESTAT AHMEDABAD where it was held that these organisations are in no way concerned with any Commercial of Industrial activity and therefore, the activity undertaken by the appellant will fall under the exclusion clause of the definition for the Commercial or Industrial Construction Service. From the above decision it can be seen that construction of residential complex for State Police Housing Corporation was held to be non taxable - impugned order set aside - appeal allowed.

Summary

Issues Involved:
1. Liability of service tax on the construction of residential complex for Gujarat State Police Housing Corporation.
2. Applicability of previous judgments and legal precedents to the current case.

Summary:

1. Liability of Service Tax:
The central issue is whether the appellant is liable to service tax for constructing a residential complex for the Gujarat State Police Housing Corporation. The appellant contends that this issue is no longer res-integra, citing multiple judgments where similar construction activities were deemed non-taxable.

2. Applicability of Previous Judgments:
The appellant relies on several judgments, including:
- Brahma Developers vs. CCE, Tirunelveli (2018): Held that construction for Gujarat State Police Housing Corporation is not liable to service tax.
- Khurana Engineering Limited vs. CCE, Ahmedabad (2011): Similar findings on non-taxability.
- Jagdish Pala vs. CCE & ST, Rajkot (2022): Reiterated the non-taxable status.
- Uni Well Exim vs. State of Gujarat (2022): Supported the appellant's position.
- CESTAT Ahmedabad (2023): Further affirmed the non-taxability.

Tribunal's Analysis and Decision:
The Tribunal carefully considered submissions from both sides and reviewed the record. It found that the issue is indeed no longer res-integra, as previous judgments consistently held that the construction of residential complexes for state police housing corporations is not subject to service tax. The Tribunal referenced the case of Riddhi Siddhi Construction, which stated that construction activities for organizations not engaged in commercial or industrial activities fall under the exclusion clause of the definition for Commercial or Industrial Construction Service.

Key Judgments Cited:
- Shri D.H. Patel & Shri R.N. Dobariya vs. CCE & ST, Surat (2013): Confirmed non-taxability for constructions intended for personal use by state entities.
- Anand Construction Co.: Clarified that buildings constructed for non-commercial purposes are non-taxable.
- Khurana Engineering Ltd.: Emphasized that services provided to the Government of India for residential use are excluded from service tax.

Conclusion:
The Tribunal concluded that the construction of residential complexes for the Gujarat State Police Housing Corporation is not liable to service tax. The impugned order was set aside, and the appeal was allowed. The decision was pronounced in open court on 24.07.2023.