Residential construction exemption and manpower tax verification shape a partial service tax relief outcome.

The demand under Construction of Residential Complex was unsustainable because the departmental circular dated 17/09/2004 treated residential complex construction as exempt up to 01/07/2010, so the confirmed demand was set aside. For Manpower Supply Agency Service, the appellant admitted liability for the balance amount, and the Tribunal required payment of that balance with interest while directing verification of the tax already claimed to have been paid, so relief was limited to the extent of any prior payment proved.

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Issues: (i) Whether the confirmed demand under the head of Construction of Residential Complex was sustainable in view of the departmental circular treating such services as exempt up to 01/07/2010. (ii) Whether the demand relating to Manpower Supply Agency Service required payment by the appellant with verification of tax already paid.

Issue (i): Whether the confirmed demand under the head of Construction of Residential Complex was sustainable in view of the departmental circular treating such services as exempt up to 01/07/2010.

Analysis: The demand was quantified under Construction of Residential Complex even though the show cause notice also referred to Commercial or Industrial Construction Service. The circular dated 17/09/2004 was applied to hold that no service tax was payable on construction of complex services (residential) till 01/07/2010.

Conclusion: The confirmed demand of Rs. 16,57,583/- under Construction of Residential Complex was set aside in favour of the appellant.

Issue (ii): Whether the demand relating to Manpower Supply Agency Service required payment by the appellant with verification of tax already paid.

Analysis: The appellant accepted liability for the balance amount, while claiming part-payment already made. The Tribunal directed payment of the admitted balance and left the earlier payment claim to be verified by the Adjudicating Authority, with interest payable if not already discharged.

Conclusion: The appellant was directed to pay Rs. 6,27,895/- along with interest, subject to verification of the amount already stated to have been paid.

Final Conclusion: The appeal succeeded on the residential construction demand and failed on the manpower supply demand to the extent of the admitted balance, resulting in a partial allowance of the appeal.

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