TaxTMI 
TaxTMI 
2024 (1) TMI 582
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....onstruction of platform for mini train in Rajiv Gandhi/Nehru Garden for UIT and construction of nallah/drain for UITs city under Jawaharlal Nehru National Urban Renewal Mission (JNNURM) of Government of India. Department formed an opinion that since the appellant constructed more than 12 residential units in the UIT colonies with the common basic amenities, they actually constructed a residential complex, the service is taxable. With respect to the work of construction of platform and laying railway tracks, department observe these services were provided as turnkey projects which included engineering expertise, procurement of goods and commissioning of the projects that too along with the material of service provider due to which there was howsoever all property in goods in the execution of contract. 1.2 The department formed an opinion that the contract of construction of platform and laying of tracks was a Works Contract Service. With these observation and after scrutinizing the records of the appellant, department observed that during the period 2008- 09 to 2012-13, appellant has provided services against receiving an amount of Rs.4,88,60,587/-. The amount of sales tax paid b....
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....tract Service is an exempted service, hence the demand has wrongly been confirmed. With respect to the contract of constructing nallah/drain also it is submitted that the same was constructed under the scheme of Government of Rajasthan (JNNURM) for improvement of sewerage system in the city. As already mentioned above, such services since were non-commercial in nature but for the sewerage function of the government, same is out of the scope of the taxability. With these submissions, learned counsel has prayed for setting aside the entire demand confirmed under the order under challenge and thus for appeal to be allowed. 4. While rebutting these submissions, learned DR has mentioned that admittedly appellant has constructed house more than 12 residential units, there is no denial for these units to have common basic amenities as that of roads, open space for park, drainage, sewerage, electricity, street lights, community centre and other common facilities. Hence, the construction for quarters by the appellant amounts to rendering the taxable service of construction of residential complex. Since the material used in providing those services was also of the appellant's, the service....
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....ervice", are liable to Service Tax under Works Contract Service; (ii) Whether the construction of railway platform and laying of railway track to ply toy train by the 'appellant' for an amusement park is liable to service tax under 'Works Contract Service' under Section 65(105) (zzzza) or excluded from its scope; (iii) Whether the construction of drain (Nallah) by the 'appellant' is liable to service tax under 'Works Contract Service' under Section 65(105) (zzzza) or excluded from its scope; (iv) If tax is payable, whether abatement is available under Notification No. 01/2006-ST dated 01.03.2006 and service tax can be paid at composite rate under Work Contract Services? 7. Issue No. 1 7.1 To adjudicate this issue, we foremost need to look into the definition of Residential Complex Service as defined under Section 65 (91a) of the Finance Act. It reads as follows: "Residential Complex - Section 65(91a) Residential Complex' means any complex comprising of- (i) a building or buildings, having more than 12 residential units; (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking ....
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....tically or horizontally but they have to fulfill the conditions of the definition given in 65 (91a) of the Act i.e. more than 12 units prior July, 2010 and more residential units should be confined in one or more common buildings but should be having common areas and common facilities. 7.4 In the present case, we observe that department has alleged that EWS house and IHSDP house though were constructed laying horizontally but were having common services. But we do not find any evidence produced by the department to prove that the housed/quarters constructed by the appellant for State Government of Rajasthan were confined in one or more building having all such common facilities as given in the said definition. We also observe that the adjudicating authority has ignored discussing this aspect of this issue. It has only been appreciated in Para 23.2 of the order under challenge that the services of constructing houses provided by the appellant are actually the Works Contract Services as covered under Section 65(105) (zzza) of the Act as the contract involves the transfer of property in goods, payment of fact issue to service provider using their own material for providing those se....
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....of carrying out,- (a) erection, commissioning or installation of plant, machinery, equipment or structures, whether prefabricated or otherwise, installation of electrical and electronic devices, plumbing, drain laying or other installations for transport of fluids, heating, ventilation or air-conditioning including related pipe work, duct work and sheet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircase or elevators; or (b) construction of a new building or a civil structure or a part thereof, or of a pipeline or conduit, primarily for the purposes of commerce or industry; or (c) construction of a new residential complex or a part thereof; or (d) completion and finishing services, repair, alteration, renovation or restoration of, or similar services, in relation to (b) and (c); or (e) turnkey projects including engineering, procurement and construction or commissioning (EPC) 8.2 The adjudicating authority below has observed that the intention of the statute under the said provision is to exclude the railway services which are received for transportation of goods....
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....nge. 10. Issue No.4 The original adjudicating authority has denied the benefit of abatement under Notification No. 01/2006 despite holding that services provided by the appellant in relation construction of residential quarters/houses, railway platforms, laying of railway track and construction of nallah or drain are properly taxable under Works Contract Service. The aforesaid notification exempts the taxable services, as described in the said notification from so much of service tax taxable calculate on a value which is equivalent to a percentage specify in the corresponding entry in the table given in the said notification to which the tax liability on Work Contract Services is at the rate of 30% of the value received i.e. the notification provides 67% abatement in case of Works Contract Service. The two conditions for applicability of said notification are as follows: (i) Cenvat credit of duty on inputs or capital goods or the Cenvat credit of service tax on input services used for providing such taxable services should not have been taken. (ii) The benefit under Notification No. 12/2003-ST dated 20.06.2003 should not have been taken by the appellant. 10.1 Apparen....