Tribunal rules in favor of appellants on service tax liability for Kendriya Vidyalaya construction

The Tribunal ruled in favor of the appellants, finding that the compound constructed for Kendriya Vidyalaya did not qualify as a 'residential complex' for service tax liability as argued by the Revenue. The Tribunal relied on the definition of 'residential complex' under Section 65(91a), emphasizing that only buildings with more than 12 residential units should be considered as such. Citing a Supreme Court decision supporting this interpretation, the Tribunal waived the pre-deposit requirement and stayed the collection of dues pending the appeal, rejecting the Revenue's argument that the entire compound should be treated as one complex.

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Issues: Interpretation of the term 'residential complex' under Section 65(91a) for service tax liability.

In this case, the appellants were registered for construction services and had built residential quarters for Kendriya Vidyalaya. The dispute arose when the Revenue argued that the entire compound should be considered a 'complex,' leading to a service tax liability due to the presence of more than 12 flats in the compound. The Counsel for the appellant relied on the definition of 'residential complex' under Section 65(91a), contending that only buildings with more than 12 residential units should be considered as such. The Counsel cited a Tribunal decision and a subsequent dismissal by the Supreme Court supporting their interpretation. The Revenue, however, maintained that the compound as a whole should be seen as one complex due to the number of residential units constructed. The AR highlighted the definition of 'residential unit' under Explanation-I of Section 65(91a) to support the Revenue's argument.

The Tribunal analyzed the definition of 'residential complex' under Section 65(91a), which includes buildings with more than twelve residential units, common areas, and additional facilities. The Tribunal noted that the explanation defining 'residential unit' did not directly impact the interpretation of 'residential complex.' Given the Supreme Court's previous confirmation of the appellant's interpretation, the Tribunal decided to waive the pre-deposit requirement and stay the collection of dues pending the appeal. The Tribunal's decision was based on the clear definition provided under the relevant tax entry, supporting the appellant's position and rejecting the Revenue's argument regarding the compound being considered a single complex.

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