Service tax demands failed where residential complex criteria were unproved, exemptions applied, and binding precedent covered identical facts.
Construction under Madhuban Bapudham Yojana was held outside Residential Complex Service because the Revenue did not establish the statutory hallmarks of a residential complex, including common facilities such as a park, lift, community hall, parking space or sewage treatment facility. Services for establishment of an electrical sub-station were treated as covered by Notification No. 45/2010 dated 20.07.2010 and Notification No. 11/2010-ST dated 27.02.2010, so the levy did not survive. The demand based on purchase orders for the Ghaziabad Development Authority stadium property was also found unsustainable by applying binding precedent that the activity was not taxable service on the facts.
Issues: (i) Whether service tax was leviable on construction services rendered for Madhuban Bapudham Yojana on the footing that the activity amounted to Residential Complex Service. (ii) Whether service tax was payable on services relating to establishment of an electrical sub-station in view of the applicable exemption notifications. (iii) Whether the demand arising from purchase orders for supplies to the stadium property of Ghaziabad Development Authority was sustainable as services or only as supply of goods.
Issue (i): Whether service tax was leviable on construction services rendered for Madhuban Bapudham Yojana on the footing that the activity amounted to Residential Complex Service.
Analysis: The activity was examined against the definition of residential complex and the earlier decision holding that similar construction under the same scheme did not satisfy that definition in the absence of common facilities such as park, lift, community hall, parking space or sewage treatment facility. No contrary positive evidence was brought by the Revenue to establish the existence of such common facilities.
Conclusion: The demand on this count was not sustainable and was set aside in favour of the assessee.
Issue (ii): Whether service tax was payable on services relating to establishment of an electrical sub-station in view of the applicable exemption notifications.
Analysis: The services were found to be covered by the exemption notifications relied upon by both sides, namely Notification No. 45/2010 dated 20.07.2010 and Notification No. 11/2010-ST dated 27.02.2010. In view of the admitted applicability of the exemption, the levy could not survive.
Conclusion: The demand on this count was not sustainable and was set aside in favour of the assessee.
Issue (iii): Whether the demand arising from purchase orders for supplies to the stadium property of Ghaziabad Development Authority was sustainable as services or only as supply of goods.
Analysis: The dispute was resolved by following the earlier final order in the assessee's own matter, where it was held that services rendered to Ghaziabad Development Authority were not services to a commercial organisation and therefore were not exigible to service tax. On that basis, the present demand was found to be unsustainable.
Conclusion: The demand on this count was not sustainable and was set aside in favour of the assessee.
Final Conclusion: All three demands were held unsustainable, the impugned order was set aside, and the appeal was allowed.
Ratio Decidendi: Where the Revenue fails to establish the statutory ingredients of taxable service, or where the activity is covered by an applicable exemption or by binding precedent on identical facts, the service tax demand cannot be sustained.
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