2015 (11) TMI 333 - AT - Service Tax

Construction of residential quarters for staff of New Parli Thermal Power Station - Residential Complex or Commercial complex service - Held that - Revenue has not contested the finding of adjudicating authority in other grounds of appeal strongly. It is also undisputed that the residential buildings constructed by the appellants are allotted by New Parli Thermal Power Station Ltd. as quarters for residential purposes to their employees. We find that the concurrent findings of both the lower authorities are correct and in consonance of law. - Appeal disposed of.

Summary

Issues involved:
Taxability of services rendered by the respondent assessee under Residential Complex Services category.

Analysis:
The appeal was filed by the Revenue against an Order-in-Appeal regarding the taxability of services rendered by the respondent assessee in constructing residential quarters for the staff of a thermal power station. The Revenue alleged nonpayment of service tax and issued a show cause notice demanding interest and penalties. The appellant contested the notice on limitation and merits grounds. The adjudicating authority dropped the proceedings, leading the Revenue to appeal. The main issue revolved around whether the construction of staff quarters fell under Residential Complex Services. The first appellate authority rejected the Revenue's appeal based on the definition of 'Residential Complex' in the Finance Act, 1994. The exclusion clause in the definition was crucial in determining tax liability. It was found that the staff quarters constructed by the respondent did not fall under the definition of 'Construction of complex,' hence not attracting service tax. The appellate tribunal upheld the lower authorities' findings, emphasizing that the staff quarters were intended for residential purposes for the power station's employees, thus not subject to service tax.

In conclusion, the appeal filed by the Revenue was rejected, and the cross objection by the assessee was disposed of. The judgment focused on the interpretation of the definition of 'Residential Complex' and the exclusion clause therein to determine the taxability of services provided by the respondent in constructing staff quarters for a thermal power station. The decision highlighted that the construction was not covered under the definition of 'Construction of complex,' leading to the dismissal of the Revenue's appeal.