TaxTMI 
TaxTMI 
TaxTMI 
2018 (9) TMI 917
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.... under the Ministry of Urban Development, New Delhi. It has been the contention of the appellant that the residential houses constructed for the self-use (including self-use by the Central Government) are exempted from payment of service tax under the provisions of Finance Act, 1994 and since the service provided by them to Government of India through M/s NBCC makes them entitled for non-payment of the service tax on the houses constructed by them for use of the Government of India himself. Their refund claim was rejected by the learned Assistant Commissioner on the ground that appellant/assessee being a sub-contractor of M/s NBCC Ltd., they are the provider of construction service to M/s NBCC and not to the Government of India and thus they have rightly paid service tax on the service provided by them to M/s NBCC which is not a part of Government of India and therefore exemption as provided under Circular No. 80/2004-ST dated 17/09/2004 is not available to them. Thus, the refund claim was found not admissible to them and same got rejected. The Commissioner (Appeals) vide impugned order dated 01/04/2014 has also confirmed the above-mentioned order of the Assistant Commissioner. The....
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....d that this Tribunal in its decision in the case of R.B. CHY Ruchi Ram Khattar & Sons vs. CST, New Delhi - 2015 (38) S.T.R. 583 (Tri. - Del.) has held that once it is held that a particular activity comes under non-taxable category even if it is provided by a sub-contractor, the service tax cannot be levied on the same. The learned Advocate has also relied upon various judgment of this Tribunal in this regard. The details of which are as follows :- i) MCM Services Pvt. Ltd. vs. CST, Delhi - 2017 (52) S.T.R. 388 (Tri. - Del.) ; ii) Khurana Engineering Ltd. vs. CCE, Ahmedabad - 2011 (21) S.T.R. 115 (Tri. - Ahmd.) ; and iii) CCE, Aurangabad vs. Mall Enterprises - 2016 (41) S.T.R. 119 (Tri. - Mumbai). 3. The learned Advocate has also relied upon the CBEC Circular No. 137/57/2011-ST dated 21st October 2011 wherein it has been clarified that :- "3. However, it is also apparent that in case the services provided by the sub-contractors to the main contractor are independently classifiable under WCS, then they too will get the benefit of exemption so long as they are in relation to the infrastructure projects mentioned above. Thus, it may happen that the main infrastructure projects....
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.... from the above mentioned definition, it can be seen that the service tax is not leviable on the residential complex service which is constructed by a person directly engaging any other person for designing/planning/ construction of such complex or house which is intended for personal use as residence of such person. The above definition as can be seen has also defined the personal use which denotes that personal use includes permitting the complex for use as residence by another person on rent or without consideration. It is a matter of record that the houses constructed by the appellant/assessee are meant for Government of India for further use by the offices of Government of India. It has also been clarified by the CBEC vide its Circular No. 332/16/2010-TRU dated 24th May 2010 as under:- "2. The matter has been examined. The activity of building new residential complexes falls within the definition of taxable service, namely, 'Construction of Complexes'. Normally, the type of complex proposed to be built by NBCC falls within the definition of residential complexes. However, as per definition, the residential complex (for Service Tax purposes) does not include a complex which is....
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....r personal use is beyond the taxable category even if this activity is undertaken by any sub-contractor the category for the levy of service tax will not change and the sub-contractor will also be entitled for exemption which is given in the definition itself. We also take shelter of decision in case of Khurana Engineering Ltd. vs. CCE, Ahmedabad - 2011 (21) S.T.R. 115 (Tri. - Ahmd.). The relevant extract of the order is reproduced here below :- "2. Learned advocate on behalf of the appellants, first of all submitted that the service was provided by the appellant to Govt. of India for providing the same as residential accommodation for the employees of the Income Tax department. He drew our attention to the definition of the construction of complex services given under the clause (30a) of Section 65 to submit that personal use, according to the definition includes permitting the complex for use as residence by another person on rent or without consideration. In view of the definition of 'Personal Use' in the definition of 'Construction of Complex' services, the services provided by the appellant is covered by exclusion, which provides that definition of service does not include th....
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.... the CPWD inviting tenders. The tender starts with words "Tenders are invited on behalf of the President of India". Further, we also find that the guarantee executed by the contractor and agreement entered by the contractor have been accepted by CPWD for and on behalf of the President of India. Learned DR also fairly admitted that he has not got any clarification from the department as to whether there is any evidence to show that CPWD and Income Tax departments are separate entities and have to be treated as separate entities. It is well known that various departments of Govt., of India act on behalf of the President of India and therefore, it cannot be said that CPWD can be equated with NBCC which is a Public Sector under taking. It is also well settled that Public Sector undertakings are not considered as Govt., departments and also cannot be considered as "STATE". Further, learned DR also could not show whether there was any agreement between Income tax department and CPWD for the purpose of construction of residential complex. Invariably when two parties are independent entities, there would be an agreement. Absence of any agreement between CPWD and Income tax department also ....