2018 (10) TMI 472 - AT - Service Tax

Construction of Complex Service - work in relation to construction of individual houses for Rajasthan Housing Board during the period 2010-11 - non-payment of service tax - Held that - An identical issue has come up for consideration before the Tribunal in the case of M/s Macro Marvel Projects Ltd. vs Commr. of Service Tax, Chennai 2008 (9) TMI 80 - CESTAT, CHENNAI , where it was held that construction of individual residential units are not subject to levy of service tax - demand set aside - appeal dismissed - decided against Revenue.

Summary

Issues: Appeal against dropping of service tax demand for construction of individual houses under 'Construction of Complex Service' for the period 2010-11.

Analysis:
1. Issue of Service Tax Demand: The Department filed an appeal against the dropping of the service tax demand by the Commissioner (Appeals) for the construction of individual houses under the category of 'Construction of Complex Service' for the period 2010-11. The original authority confirmed the demand, interest, and penalty, which was challenged by the assessee-Respondents. The Commissioner (Appeals) dropped the demand after considering submissions. The Tribunal referred to a similar case where it was held that the construction of individual residential units does not fall under the definition of 'construction of complex' as per the Finance Act, 1994. The definition of 'residential complex' under Section 65(91a) clarifies that a complex should have more than twelve residential units to be taxed. The Tribunal noted that the law did not intend to levy service tax on the construction of individual residential units. The Tribunal also discussed the applicability of 'works contract' and concluded that individual residential units do not qualify as a 'residential complex or a part thereof.' Therefore, the Tribunal set aside the impugned order and allowed the appeal, dismissing the Department's appeal against dropping the service tax demand.

2. Precedent and Confirmation: The Tribunal's decision was confirmed by the Hon'ble Supreme Court, providing further support to the interpretation that construction of individual residential units does not attract service tax under the Finance Act, 1994. The Tribunal followed previous decisions and found no reason to interfere with the impugned order, sustaining it along with the reasons mentioned therein.

In conclusion, the Tribunal's judgment clarified that the construction of individual residential units does not fall under the definition of 'construction of complex' for the purpose of levying service tax. The decision was supported by a precedent and upheld by the Hon'ble Supreme Court. The appeal filed by the Department against dropping the service tax demand was dismissed, affirming the Commissioner (Appeals)'s decision.