2017 (1) TMI 846 - AT - Service Tax

Tribunal rules in favor of appellants on service tax for construction of houses

The Tribunal ruled in favor of the appellants regarding the service tax liability on the construction of eight houses for the Rajasthan Housing Board in ... Construction of Complex Services - period involved is 2006-07 and 2007-08 - service rendered by the appellant for Rajasthan Housing Board, Jaipur with reference to construction of eight Nos. of houses at Pratap Nagar, Jaipur - whether the activity of constructing individual houses for Housing Board can be covered under the taxable service under the head construction of Complex Services? Held that: - the construction of Complex Service stipulates that there should be more than 12 residential units. Admittedly, in the present case, we are dealing with individual eight houses. On this ground alone, the impugned order is not sustainable - appeal allowed - decided in favor of appellant. Issues:1. Service tax liability on construction of houses for Rajasthan Housing Board.2. Interpretation of 'Construction of Complex Services' for service tax applicability.3. Comparison with previous tribunal decisions.4. Applicability of the decision in Madhukar Mittal vs. CCE, Panchkula.Analysis:The appeal addressed the service tax liability concerning the construction of eight houses for the Rajasthan Housing Board in Jaipur. The appellants argued that their activity did not fall under taxable services, citing a previous tribunal decision in their favor and emphasizing the limited number of houses involved. The appellant contended that the service could not be taxed under 'Construction of Complex Services' due to the specific requirements of the category. On the other hand, the Revenue supported the lower authority's findings and referred to a different tribunal decision for validation.Upon reviewing the appeal records, the Tribunal observed that the construction of Complex Services typically involves more than 12 residential units, whereas the present case dealt with only eight individual houses. This distinction rendered the impugned order unsustainable. The Tribunal also highlighted the previous ruling in the appellant's favor, where a similar service tax demand was set aside. The Tribunal deemed the reliance on the decision in Madhukar Mittal vs. CCE, Panchkula inappropriate for the current case due to the absence of specific findings supporting the tax liability.Consequently, the Tribunal concluded that the impugned order was not sustainable and proceeded to set it aside, ultimately allowing the appeal in favor of the appellants. The judgment was pronounced in open court on 04.01.2017 by the Tribunal.