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TMI Blog2024 (7) TMI 755X X X X Extracts X X X X X X X X Extracts X X X X ..... dia directly and end use of the residential complex by Govt. of India is covered by the definition Personal Use in the explanation to definition of residential complex service, the other aspects need not be considered.' In the present matter works orders clearly shown that respondents has provided the construction services to GSPHCL, SMC SUDA and status of these organisations are Government Bodies. Thus, the view taken by the Ld. Commissioner is agreed, that construction works undertaken on behalf of the Government for non-commercial purpose are outside the purview of the Service tax. The service provided by the respondents are to be treated as service provided to Govt. and end use of the residential complex by Govt. is covered by the definition Personal Use in the explanation to definition of residential complex service and not leviable to Service tax. There are no merit in the present appeals of the department - appeal dismissed. - HON'BLE MEMBER ( JUDICIAL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) , MR. C L MAHAR Shri Tara Prakash , Deputy Commissioner ( AR ) for the Appellant Shri Brijesh N Limbachia , Advocate for the Respondent ORDER RAMESH NAIR The p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y these agencies are meant for self use and for non-commercial purpose. However the said conclusion drawn by the Ld. Commissioner is erroneous. In the present case M/s GSPHCL, being party to direct contract with Gujarat Government (Police and Jail Department), engaged the respondent as a sub-contractor, for carrying out the whole construction, hence the services provided by the respondent to M/s GSPHCL satisfy the definition of Construction of Complex and residential complex under Section 65(30a) and 65 (91a) respectively of the Act and are taxable services. 2.1 He also submits that conclusion drawn by the Ld. Commissioner is also erroneous, in as much as, although admittedly SMC is a Government body, the complex got built by SMC were not meant for self use as has been concluded by the Ld. Commissioner. But Such complex were meant to be sold/distributed on allotment basis for residential purpose to urban poor after payment of sums ranging from Rs. 25,000/- to Rs. 35,000/- per flat with instalment facilities. These facts as revealed by the SMC have not been disputed by the respondent in their defence. 2.2 He further submits that similarly, the conclusion drawn by the Ld. Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruction Services provided by the respondents to M/s Gujarat State Police Housing Corporation Ltd. (GSPHCL), M/s Surat Municipal Corporation (SMC) and M/s Surat Urban Development Authority (SUDA) are liable to service tax. Before deciding the issue it is necessary to go through the relevant works orders issued by GSPHCL, SMC and SUDA to respondents. 4.2 We find that work orders for construction of residential complexes at Surat were issued by GSPHCL. Further, respondents have also constructed residential complexes for SMC against work orders issued under Jawaharlal Nehru National Urban Renewal Mission (JnNURM) scheme. From the scrutiny of the work orders issued by SUDA we find that the respondent also constructed residential complex for SUDA under Low Income Group Scheme. It is seen that the definition of the Works Contract Service and Construction of Residential Complex Service reads as under:- Works contract , for the purposes of section 65(105)(zzzza), means a contract wherein:- (i) transfer of property in goods involved in the execution of such contract is leviable to tax as sale of goods, and (ii) such contract is for the purposes of carrying out, (a) erection, commissioning or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstructed by a person directly engaging any other person for designing or planning of the lay out and the construction of such complex is intended for personal use as residence by such persons. We also noticed that this expression has been interpreted by Tribunal in the case of Sima Engineering-2018 (5) TMI 405 (Tri.-Chennai), wherein after examining the conclusion is as follows:- 7. Undisputedly, 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. 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 engaging any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service tax. In such a situation in our opinion, there is no liability on the appellant to pay the service tax. 4.4 Similar view has also been taken in the case of Khurana Engineering - 2011 (21) S.T.R. 115 (Tri.)/2010 (11) TMI 81 CESTAT -Ahmd, wherein following has been observed:- 2. Learned advocate on behalf of the appellants, first of all submitted that the service was provided by the appellant to Govt. of India for providing the same as residential accommodation for the employees of the Income-tax department. He drew our attention to the definition of the construction of complex services given under the clause (30a) of Section 65 to submit that personal use, according to the definition includes permitting the complex for use as residence by another person on rent or without consideration. In view of the definition of 'Personal Use' in the definition of 'Construction of Complex' services, the services provided by the appellant is covered by exclusion, which provides that definition of service does not include the complex which is constructed by a person directly engaging any other person for designing or planning of the layout and the construction of such co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rantee executed by the contractor and agreement entered by the contractor have been accepted by CPWD for and on behalf of the President of India. Learned DR also fairly admitted that he has not got any clarification from the department as to whether there is any evidence to show that CPWD and Income-tax departments are separate entities and have to be treated as separate entities. It is well known that various departments of Govt., of India act on behalf of the President of India and therefore, it cannot be said that CPWD can be equated with NBCC which is a Public Sector under taking. It is also well settled that Public Sector undertakings are not considered as Govt., departments and also cannot be considered as STATE . Further, learned DR also could not show whether there was any agreement between Income-tax department and CPWD for the purpose of construction of residential complex. Invariably when two parties are independent entities, there would be an agreement. Absence of any agreement between CPWD and Income-tax department also supports the case of the learned advocate. Further, since on behalf of the President of India contractors are entered into, agreements are entered into ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment and therefore this service cannot be included in the definition of residential complex services. It is basically the case of one department taking the help of another department to get the work done basically because of specialization of that department in preparing documents and get the work executed. 3. We also find alternative submissions made by the learned advocate are to be sustained. The first alternative submission made was that the show cause notice was issued on 4-10-2007 whereas, the service tax was payable for the period from 16-6-2005 to 30-7-2007 and therefore, a portion of the demand is time barred. Even if a view is taken that CPWD is to be treated as separate entity, in our opinion appellant would be justified to entertain a belief that CPWD and Income-tax department are to be treated as part of the Govt. of India and therefore, services provide by him would not be liable to service tax. Further, as submitted by the appellant in his submission, the agreement also provides that in case of liability of any tax, the service receiver is liable to pay. In these circumstances, the appellants had no reason to resort to suppression or mis-declaration of the facts t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of equity or control by Govt., and setup by an act of the parliament or state legislature to carryout any function entrusted to a Municipality under article 243W of constitution of India. In the present matter works orders clearly shown that respondents has provided the construction services to GSPHCL, SMC SUDA and status of these organisations are Government Bodies. Thus, we are in complete agreement with the view taken by the Ld. Commissioner that construction works undertaken on behalf of the Government for non-commercial purpose are outside the purview of the Service tax. 4.7 In view of the fact that on records, we have held that service provided by the respondents are to be treated as service provided to Govt. and end use of the residential complex by Govt. is covered by the definition Personal Use in the explanation to definition of residential complex service and not leviable to Service tax. 5. Therefore in view of the settled legal position as discussed above, we find no merit in the present appeals of the department. Hence , we uphold the Orders-in-Original and dismiss the appeals. Cross Objections also stand disposed of. ( Pronounced in the open court on 12. 07. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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