2019 (10) TMI 171

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....o by the appellant. This Bench vide Final Order No. A/30172-30178/2019 dt.31.01.2019 set aside the demands raised in the SCN holding that service tax is not applicable on construction services provided by the builder prior to 01.07.2010. 3. The present appeal pertains to the subsequent two SCNs for subsequent periods, part of which falls prior to 01.07.2010 and the rest post 01.07.2010. These demands are as follows: SCN reference Period Proposed Demand SCN OR No. 59/2011-Adjn (S.T.) Gr.X dated 23.04.2011 Jan 2010 to Dec 2010 Rs. 12,06,447/- SCN OR No. 53/2012-Adjn (Addl.Commr) dated 24.04.2012 Jan 2011 to Dec 2011 Rs. 27,61,048/- Total   Rs. 39,67,475/- 4. It is alleged in the SCNs that the assessee had built residential complexes and have entered into a sale deed for sale of undivided portion of land together with semi finished portion of the flat/house and a separate agreement for completion of construction with customers. On execution of sale deed the right in property got transferred to the customer. There is no demand up to this stage. Thereafter, under an agreement of completion of construction was entered into which is taxable a....

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....ed it to the original authority for the limited purpose of re-computing the service tax. 5. Aggrieved by this order, the present appeal is filed. Learned counsel for the appellant argued as follows: 1) They have been building individual houses in the project "Nilgiri Homes" and not flats and therefore, the same is not chargeable to service tax as construction of residential complex service does not include individual homes. He draws the attention of the bench to the definition of residential complex in Section 65(91a) which is as follows: "residential complex" means any complex comprising of- (i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex i....

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....sidential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex. 'Residential complex' stands defined under clause (91a) of Section 65 of the Act, which is as follows :- "(91a) "residential complex" means any complex comprising of - (i) a building or buildings, having more than twelve residential units; (ii) a common area; and  (iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as residence....

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.... venture "Nilgiri Homes" are row houses and not flats. Since it has been settled by the Tribunal and upheld by the Hon'ble Supreme Court that for something to be residential complex, there should be at least 12 residential units in each building, the structures which they built do not qualify as residential complexes and accordingly, the entire demand needs to be set aside. He would, further, submit that relying on the aforesaid order of Macro Marvel Projects Ltd (supra) the Tribunal Allahabad has in the case of Baba Constructions Pvt Ltd [2018 (15) GSTL 345] set aside the demand where less than 12 residential units were in each building. This judgment of the Tribunal Allahabad was upheld by the Hon'ble Supreme Court as reported in 2018 (15) GSTL J120 (SC). He would submit that as the issue has been settled by the Hon'ble Supreme Court not once but twice, the entire demand needs to be set aside on this ground alone. 4) As an alternative argument, he would submit is that even if demands are liable to be raised, no service tax is chargeable for construction services prior to 01.07.2010 and in the first demand covering the period January, 2010 to December, 2010 part of the de....

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....be considered as residential complexes or otherwise, he would submit that section 65(91a) provides for taxing any complex comprising a building or buildings having more than 12 residential units. He would further draw the attention of the bench to Explanation-B to this section which says "residential unit" means a single house or a single apartment intended for use as place of residence. He would submit that individual houses are clearly covered in the definition of residential units and therefore a complex may have more than 12 individual houses and it still qualifies as residential complex. If we interpret residential complex as meaning that each and every building should have more than 12 residential units, then the words "or the buildings" in the definition of residential complex, the words "single house" in the definition under residential unit would become otiose. Otherwise, there could be no situation wherein 12 or more than 12 single houses can exist in the same building. Hence, the explanation provided in respect of residential units with the word "single house" and also the phrase "building or the buildings" in the main part of definition should be allowed to have their i....

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....he case of Macro Marvel Projects Ltd (supra) and subsequent judgments. 9. Learned DR correctly points out that while passing the order in the case of Macro Marvel Projects Ltd (supra) the Tribunal has considered a truncated portion of the definition of residential complex. They have not copied the explanation to the section which specifically states that residential unit also includes single houses. Section 65(91a) reads as follows: "residential complex" means any complex comprising of- (i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking space, community hall, common water supply or effluent treatment system, located within a premises and the layout of such premises is approved by an authority under any law for the time being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as residence by such person. Explanation. - For the removal of doubts, ....