2012 (11) TMI 1000 - AT - Service Tax

Demand of service tax under construction of complex as defined under section 65(91a) of Finance Act - Appellants have undertaken construction work of 15 residential houses under a contract with M.P. Housing Board Held that - Submission of the appellant is that the entry covers only such building where each of the building has got more than 12 residential units. They have built 15 independent houses and not a complex - service tax can be demanded under section 65(105)(zzzh) only if the building concerned has more than 12 residential units in the building and such levy will not apply in cases where in one compound has many buildings, each having not more than 12 residential units In favor of assessee

Summary

Issues:
1. Whether the construction of 15 residential houses constitutes a taxable activity under entry 65(105)(zzzh) for 'construction of complex' as per the Finance Act, 1994.
2. Interpretation of the definition of "residential unit" under section 65(91a) of the Finance Act, 1994.
3. Applicability of the definition of "residential complex" under section 65(91a) for both works contract and construction of a residential complex.
4. Impact of the Supreme Court's decision on the appeal filed by the Revenue.

Analysis:
1. The Appellants argued that their construction of 15 independent houses did not constitute a complex under entry 65(105)(zzzh) of the Finance Act, 1994, which requires each building to have more than 12 residential units. They relied on a previous Tribunal decision in the case of Macro Marvel Projects Ltd. v. CST [2008] 17 STT 479 (Chennai - CESTAT) to support their position.

2. The Revenue contended that even if the residential units are separate, they should be considered under the definition of "residential unit" as per section 65(91a) of the Finance Act, 1994, which includes a house or single apartment intended for use as a place of residence.

3. The Tribunal analyzed the definitions under section 65(91a) and concluded that the definition of "residential complex" applies to both works contract and construction of a residential complex. It emphasized that the interpretation of "residential complex" should be consistent across different tax levies, rejecting the argument that it should vary based on the type of activity.

4. The Tribunal noted that the Supreme Court had previously dismissed the Revenue's appeal in a similar matter, establishing a precedent that service tax can only be demanded under section 65(105)(zzzh) if a building has more than 12 residential units. The Tribunal, therefore, set aside the impugned order and allowed the appeal, ruling in favor of the Appellants based on the established legal principles and precedents.

This detailed analysis of the judgment provides a comprehensive understanding of the legal issues involved and the Tribunal's reasoning in reaching its decision.