Service Tax Demand for House Construction Set Aside Due to Lack of Common Facilities

The Tribunal set aside the demand for Service Tax on construction of houses, amounting to around Rs. 18 lakh, as it did not meet the criteria of Residential Complex Service due to the absence of common facilities. Relying on the definition of a residential complex, the Tribunal emphasized the necessity of common facilities for a building to qualify as such. The appellant's appeal was allowed, citing the lack of evidence of common facilities, leading to the conclusion that the construction did not constitute a residential complex service. The appellant was granted consequential relief based on this finding.

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Issues:
1. Construction of Residential Complex Service under Service Tax.

Analysis:
The case involved a dispute regarding the demand of Service Tax amounting to around Rs. 18 lakh for the construction of houses in a specific scheme. The appellant contended that the construction did not fall under the definition of Residential Complex Service as there were no common facilities like Park, Lift, Parking Space, Community Hall, Common Water Supply, or Effluent Treatment System in the complex. The appellant relied on a previous case decided by the Tribunal to support their argument. The Tribunal referred to the definition of a residential complex under Clause (91a) of Section 65 of the Finance Act, 194 and emphasized the requirement of common facilities and a common area for a building to qualify as a residential complex. The Tribunal noted that the Revenue failed to establish the presence of such common facilities in the case at hand, leading to the conclusion that the construction did not constitute a residential complex service.

In line with the precedent set by the Tribunal and the absence of evidence regarding common facilities, the impugned order was set aside, and the appeal was allowed in favor of the appellant. The Tribunal highlighted the importance of fulfilling the criteria outlined in the definition of a residential complex to determine the applicability of Service Tax. Consequently, the appellant was granted consequential relief based on the lack of proof regarding the existence of common facilities like Park, Lift, and Community Hall in the construction project.

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