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TMI Blog2018 (5) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... d for the period prior to 1.6.207 is not sustainable and requires to be set aside. The appellants have entered into an agreement with TNPHCL for providing services in relation to construction of residential complex. However, these are meant for use of police personnel - similar issue decided in the case of 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. The levy of service tax cannot sustain. Appeal allowed - decided in favor of appellant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. which was followed by the Tribunal in the case of URC Construction P. Ltd. Vs. Commissioner of Central Excise - 2017 (50) STR 147. The ld. counsel argued that for the period after 1.6.2007, the levy cannot sustain in terms of the decision in the case of Nitesh Estates Vs. Commissioner of Central Excise - 2015 (40) STR 815. That this Tribunal in the case of Commissioner of Central Excise Vs. Lanco Tanjore Power Co. Ltd. vide Final Order No. 40792 & 40793/2018 dated 16.3.2018 held that when construction activity is undertaken for personal use, the same is excluded from the definition of residential complex contained in Section 65(91a) of Finance Act, 1994. The appellants were engaged by TNPHCL to construct quarters for police personnel. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16.6.2005 to 31.12.2007 Thus, it can be seen that part of the demand is for the period prior to 1.6.2007. By applying the decision in the case of Larsen & Toubro - 2015 (39) STR 913, we hold that the demand for the period prior to 1.6.207 is not sustainable and requires to be set aside, which we hereby do. For the period after 1.6.2007, the ld. counsel has argued that the decision in the case of Nithesh Estates (supra) would apply. The definition of residential complex is reproduced as under:- As per section 65[(30a) of the Finance Act, 1994, „construction of complex‟ means - (a) construction of a new residential complex or a part thereof; or (b) completion and finishing services in relation to residential complex such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greement with TNPHCL for providing services in relation to construction of residential complex. However, these are meant for use of police personnel. The said issue was considered by the Tribunal in the case of Nithesh Estates (supra), wherein the Tribunal has observed as under:- "7.1 In this case there is no dispute and it clearly emerges that the residential complex was built for M/s. ITC Ltd. and appellant was the main contractor. Appellant had appointed sub-contractors all of whom have paid the tax as required under the law. The question that arises is whether the appellant is liable to pay service tax in respect of the complex built for ITC. From the definition it is quite clear that if the complex is constructed by a person directly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... engages a sub-contractor for carrying out the whole or part of the construction, then the sub-contractor would be liable to pay Service Tax as in that case, NBCC would be the service receiver and the construction would not be for their personal use." It can be seen 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. It is quite clear that C.B.E.&C. also has clarified that in cases like this, service tax need not be paid by the builder/developer who has constructed the complex. If the builder/developer constructs the complex himself, there would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... son for designing or planning of the layout, and the construction of such complex is intended for personal use as residence by such person. Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this clause, - (a) "personal use" includes permitting the complex for use as residence by another person on rent or without consideration; (b) "residential unit" means a single house or a single apartment intended for use as a place of residence;" The above definition specifically excludes construction undertaken for personal use and such personal use includes permitting the complex for use as residence by another person. We find that the above exclusion clause covers the construction activity undertaken ..... X X X X Extracts X X X X X X X X Extracts X X X X
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