2013 (10) TMI 815 - AT - Service Tax

Residential Complex - Section 65(91a) whether Construction of Complex Service is chargeable to service tax Held that - The houses that were constructed should be considered to be in the personal use of the State Government relying upon the judgement of Khurana Engineering Ltd. Vs CCE, Ahmedabad (2010 (11) TMI 81 - CESTAT, AHMEDABAD)- the houses constructed are owned by the State Government and were allotted to police personnel by the Government - The Police Housing Corporation appears to have worked as an extended arm of the Government - Following decision of S KADIRVEL VERSUS COMMISSIONER OF CENTRAL EXCISE, SERVICE TAX, TIRUCHIRAPALLI 2013 (8) TMI 262 - CESTAT CHENNAI , stay granted.

Summary

Issues:
Stay petitions for waiver of pre-deposit of service tax amounts confirmed against the appellant for work undertaken for Gujarat State Police Housing Corporation Ltd. (GSPHCL) during 2007-2012. Interpretation of exemption eligibility for construction work done for or on behalf of the Government of Gujarat.

Analysis:
The appellant filed two stay petitions seeking waiver of pre-deposit amounts confirmed against them for service tax liabilities related to work done for GSPHCL. The adjudicating authority upheld the dues, citing GSPHCL's status as a public purpose vehicle of the Government of Gujarat, making it ineligible for any exemptions granted for government-related work. The appellant argued that GSPHCL acts as a contractor for construction and maintenance work, primarily for the Police and Jail departments of the government. The appellant contended that the circular regarding tax liability for National Building Construction Corporation Ltd. does not apply in this case as the constructions were for residential purposes of government personnel. Reference was made to a Co-ordinate bench decision in a similar case to support their stance.

The departmental representative countered, stating that the construction of a complex should be used for the residence of the constructor, which was not the case with GSPHCL's constructions allotted to police and jail department personnel. The representative highlighted instances where the appellant constructed buildings for the Surat Municipal Corporation, which were subsequently sold. Upon reviewing the submissions and records, the Tribunal found that the appellants were providing commercial or industrial construction services falling under the Finance Act, 1994. The key consideration was whether the appellants rendered services to individuals who did not occupy the dwellings. Drawing from a previous case involving Tamil Nadu Police Housing Corporation Ltd., the Tribunal granted waiver and stay against the demands and penalties, emphasizing that the houses constructed should be for the personal use of the State Government.

In alignment with the precedent set in the S Kadirvel case before the South Zonal Bench, Chennai, the Tribunal concluded that the appellant established a case for complete waiver of the pre-deposit amounts. The application for waiver was approved, and recovery of the amounts stayed pending the appeal's disposal. The judgment was pronounced on 26.07.13.