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2024 (5) TMI 738 - AT - Service TaxExemption from service tax - service provided to non- Government Organization which are not engaged in any commercial activities - construction of staff quarters by the appellants/respondents for M/s. Gujarat State Police Housing cooperation Limited - HELD THAT - This issue has already been decided by this Tribunal in case of RD CONTRACTOR COMPANY VERSUS COMMISSIONER OF CENTRAL EXCISE ST, ANAND (VICE-VERSA) 2023 (2) TMI 946 - CESTAT AHMEDABAD where it was held that 'This very issue pertains to Gujarat State Police Housing Corporation Limited has been considered by this Tribunal in SHRI S. KADIRVEL VERSUS CCE ST, TRICHY 2018 (6) TMI 926 - CESTAT CHENNAI where it was held that The definition of residential complex specifically excludes construction undertaken for personal use and such personal use includes permitting the complex for use as residence by another person. The exclusion clause covers the construction activity undertaken by the assessee.' The impugned order is not sustainable - appeal allowed.
Issues Involved:
The issues involved in this case pertain to the construction of staff quarters by the appellants/respondents for a specific entity, the classification of the entity as a government organization, and the liability of service tax on the services provided. Construction of Staff Quarters: The appellants were engaged in civil construction/repair works for various customers, including Gujarat State Police Housing Cooperation (GHPSC). The department issued show cause notices confirming the liability up to the Commissioner (Appeal) level. The key issue in all three appeals was the construction of staff quarters by the appellants for GHPSC. The Tribunal referred to previous decisions supporting the appellants' position based on service provided to non-Government Organizations not engaged in commercial activities. Classification of Entity and Service Tax Liability: The Tribunal considered whether GHPSC should be classified as a government organization, as it is 100% owned by the Government of Gujarat. Previous judgments were cited to support this classification. The Tribunal analyzed the nature of the construction services provided and the ownership of the constructed buildings. It was noted that similar issues had been considered in other cases involving police housing corporations. The Tribunal found that the demand for service tax could not be sustained based on the definition of residential complex and personal use as per relevant laws and circulars. The Tribunal concluded that the impugned order was not legally sustainable for two appeals but upheld the order for the third appeal. Conclusion: The Tribunal allowed two appeals related to the construction of staff quarters, setting aside the impugned orders as not legally sustainable. However, the Tribunal upheld the order for the third appeal. The decision was based on the classification of the entity as a government organization and the exemption from service tax based on the nature of the construction services provided. The appeals were decided accordingly, with the department's appeal failing to succeed in one instance. [Order pronounced in the open court on 15.05.2024]
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