2018 (9) TMI 1589 - AT - Service Tax

Construction of Complex Service - construction of residential complex and Pondicherry University(PU) and appellant s quarters made to CPWD/PD - Demand of Service Tax - Held that - The decision of this Tribunal in M/s. Sima Engineering Constructions 2018 (5) TMI 405 - CESTAT CHENNAI covers the issue where relaince placed in Nitesh Estates Vs. Commissioner of Central Excise 2015 (11) TMI 219 - CESTAT BANGALORE , where it was held that If the land owner enters into a contract with a promoter/builder/developer who himself provided service of design, planning and construction and if the property is used for personal use then such activity would not be subject to service tax - demand do not sustain. Penalty - Tower Foundation for M/s. BSNL. under Commercial or Industrial Construction Service - the tax liability was paid up by the appellant albeit under another head, namely, CICS whereas the demand confirmed is under Works Contract Service - Held that - Setting aside of penalty is judicious especially considering that the amount of tax liability was already paid up by the respondents. Appeal dismissed - decided against Revenue.

Summary

Issues:
I. Demand of service tax under Construction of Complex Service for construction of residential complex and Pondicherry University (PU) and appellant's quarters made to CPWD/PD.
II. Demand of service tax for Tower Foundation for M/s. BSNL under Commercial or Industrial Construction Service (CICS).

Analysis:

Issue I:
The Original Authority confirmed the demand of service tax on the construction of residential complex and Pondicherry University quarters, but the Commissioner (Appeals) set aside the demand and penalties imposed. The Department appealed this decision. The Tribunal noted that the issue of tax liability for residential complex construction had been settled in favor of respondents in previous cases. The Tribunal cited precedents like Nithesh Estates Ltd. v. Commissioner of C. Ex., S.T. & Cus., Bangalore-II and Commissioner of Central Excise, Puducherry v. M/s. Lanco Tanjore Power Co. Ltd. to support this decision. As the tax liability was already paid by the appellant for the Tower Foundation, the demand under Works Contract Service was deemed incorrect. The Tribunal upheld the Commissioner's decision, finding no merit in the Department's appeal.

Issue II:
Regarding the demand of service tax for Tower Foundation for M/s. BSNL under CICS, the appellant had paid the tax liability under a different category. The Tribunal found the dropping of penalties by the lower appellate authority to be justified, considering the tax had already been paid. Consequently, the Tribunal dismissed the Department's appeal, as there was no merit found in challenging the lower appellate authority's decision.

In conclusion, the Tribunal dismissed the Department's appeal as it found no merit in challenging the lower appellate authority's decisions. The issues of tax liability for construction of residential complexes and Tower Foundation for M/s. BSNL were settled in favor of the respondents based on precedents and the tax payments made by the appellant.