TaxTMI 
TaxTMI 
2024 (7) TMI 755
X X X X Extracts X X X X
X X X X Extracts X X X X
...., Construction of residential buildings under Low Income Group Schemes, Construction of residential quarters under the JNNURM scheme for Surat Municipal Corporation, Surat Urban Development Authority, Airport Authority of India, Western Railway etc. during the period in dispute i.e. 2007-08 to 2011-12 but not registered with Service tax department. An inquiry was initiated against the respondents, and required documents were called for and resumed under summons. 1.2 On completion of the investigations, it appeared that the respondents have not paid Service tax on Construction of Residential quarters for M/s GSPHCL; construction of residential quarters under JnNURM Scheme for SMC and construction of residential quarters under LIG Scheme for Surat Urban Development Authority (SUDA), on the plea that the construction services provided by them to the government organization were not taxable. However, investigation conducted and the evidences gathered during such investigation revealed that the residential complex constructed by them for the aforesaid three service recipients were not for their personal use, and it appeared that the same was taxable under 'Construction of Complex' un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d for SUDA is allotted to Low Income Group. It is clear that such complex were not meant for self-use of the employee of SUDA. 2.3 He argued that the conclusion drawn by the Ld. Commissioner that complex got built by these agencies was used for non-commercial purpose is also erroneous, in as much as, admittedly such residential dwelling were not distributed to urban poor/Low Income Group, free of charges, but allotted only payment of specified amount with instalment facilities, though may be at subsidized rates. 2.4 He also submits that the reliance placed by the Commissioner on the decisions of Hon'ble CESTAT in the case of M/s Khurana Engineering Ltd. Vs. CCE, Ahmedabad reported vide 2011(21)STR 115 (Tri. Ahmedabad) is misplaced and not applicable to facts of the present case. Moreover the said decision has not been accepted by the department, but has been appealed against before the Hon'ble High court of Gujarat. 3. Shri Brijesh N Limbachia, Learned Counsel appearing on behalf of the respondents supported the finding of the Ld. Commissioner. He placed reliance on the following judgements:- (i) M/s Sima Engg. Construction Vs. CCE Trichy - 2010 TIOL 1734 (CESTAT ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....eet metal work, thermal insulation, sound insulation, fire proofing or water proofing, lift and escalator, fire escape staircases 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) projects; (Explanation to Section 65 (105) (zzzza) of Finance Act, 1994) "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 in....
X X X X Extracts X X X X
X X X X Extracts X X X X
....l use has been defined as permitting the complex for use as residence by another person on rent or without consideration. In this case what emerges is that ITC intended to provide the accommodation built to their own employees. Therefore it is covered by the definition of "personal use" in the explanation. The next question that arises is whether it gets excluded under the circumstances. The circular issued by C.B.E.&C. on 24-5-2010 relied upon by the learned counsel is relevant. Para 3 of this circular which is relevant is reproduced below : "3. As per the information provided in your letter and during discussions, the Ministry of Urban Development (GOI) has directly engaged the NBCC for constructing residential complex for Central Government officers. Further, the residential complexes so built are intended for the personal use of the GOI which includes promoting the use of complex as residence by other persons (i.e. the Government officers or the Ministers). As such the GOI is the service receiver and NBCC is providing services directly to the GOI for its personal use. Therefore, as for the instant arrangement between Ministry of Urban Development and NBCC is c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....it is excluded from the definition of construction services. He also relies upon the reply given by the Central Board of Customs and Excise to National Building Construction Corporation Limited (NBCC), vide Letter No. F. No. 332/16/2010-TRU., dated 24-5-2010, in support of this contention. On the other hand, learned DR submits that it is not correct to say that service has been provided to Govt. of India directly. He submits that the land is owned by Income-tax department and Income-tax department has requested the CPWD to construct the quarters for them and funds have been made available to CPWD by Ministry of Finance for this purpose. CPWD in reality has acted as a bridge between Income-tax department and the contractor and after the residential complex is constructed, the same was handed over by CPWD to Income-tax department and therefore, in terms of the clarification issued by the Board also, the appellant would be liable to pay service tax. He drew our attention to the letter relied upon by the learned advocate and submitted that in that letter, it has been clarified by the Board that if NBCC were to construct residential accommodation and handover to Govt. of India, there wo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ee with the learned Commissioner when he says that the exclusion clause in the definition cannot be applied to the Govt. of India. For ready reference, definition of Construction of Complex Services is reproduced :- (a) Construction of a new residential complex or a part thereof; or (b) Completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall preparing, 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] The definition of residential complex service has been given under clause (91a) of Section 65 as under; "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, loca....
X X X X Extracts X X X X
X X X X Extracts X X X X
....or mis-declaration of the facts to avoid payment of service tax since if the service tax was liable, as per the contract, CPWD was liable to pay service tax. Under these circumstances, invocation of extended time limit cannot be justified in this case. Therefore, penalties imposed under various sections of Finance Act, 1994 also cannot be upheld. 4. Another alternative submission made by the learned advocate was that the contract between the appellant and the CPWD was a works contract and VAT has been paid treating the same as works contract and therefore, no service tax was liable to be paid for the period prior to 1-6-2007. He has cited several decisions in support of this contention. However, we find that the decision of the Tribunal in the case of Cemex Engineers v. Commissioner of Service Tax Cochin - 2010 (17) S.T.R. 534 (Tri. - Bang.) is relevant. In this case, the Tribunal had considered the definition of residential complex services and works contract services and had come to the conclusion that in view of the fact that construction of new residential complex was included in the definition of works contract, the construction of residential complex on the ....