TaxTMI 
TaxTMI 
2026 (6) TMI 1012
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....l are that pursuant to an investigation which revealed that the appellant had rendered civil construction works, i.e., construction of residential complexes in the Tsunami affected areas for Tsunami District Implementation Unit, Pudukkotai (TDIU) and for Peoples Development Association (PDA), Tamil Nadu Police Housing Corporation (TNHPCL), Harley Ram Nursing Home as well as for Madurai Municipal Corporation, a show cause notice dated 16.10.2012 was issued demanding service tax for the period from 01.04.2007 to 31.03.2012, invoking the extended period of limitation, and alleging that the appellant had provided "Commercial or Industrial Construction Service" as per Section 65 (25)(b) of the Finance Act, 1994 (Act) and "Construction of Complex service" as per Section 65(91a) of the Act. After due process of law, the Adjudicating Authority confirmed the demand of service tax of Rs.1,40,58,905/- along with applicable interest and imposed equivalent penalty under Section 78 of the Act and a penalty of Rs.10,000/- under both Section 77(1)(a), and Section 77(2) of the Act. Hence this Appeal. 4. The appeal No. ST/40300/2015 has been filed by Shri. P. Panneerselvam, the Managing Director ....
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....g the construction of houses for Tsunami District Implementation Unit, Pudukkotai (TDIU) and for Peoples Development Association (PDA) undertaken by PPPL as well as that undertaken by Mr. Panneerselvam for World Vision India, Ld. Counsel contended that these were not intended for sale, a condition precedent under explanation under Section 65 (105) (zzzh) for applicability of the said clause and hence construction of these individual houses for Tsunami affected poor homeless people provided by these organizations free of cost would come within the ambit of exclusion provided in connection with personal use in the explanation to Section 95(91a) as well as the exemption in terms of Sl.No.12 of mega notification No.20/2012-ST dated 20.06.2012. Reliance was placed on the Final Order No.40124/2025 dated 27.01.2025 in the Service Tax Appeal No.40609/2014 in the case of M/s. K.B. & Co. v The Commissioner of GST & Central Excise, Tirunelveli, whereby the Chennai Bench of the Tribunal had determined that such construction of individual houses in the Tsunami affected areas by Tsunami District Implementation Unit, Pudukkotai (TDIU) were held to be not exigible to service tax. 8. Ld. Counsel....
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....service tax. Further, the appellant's claim of the service tax being clearly exempted from service tax as it was rendered for health services and to Tsunami affected people by the Government itself cannot be construed as suppression and service tax evasion. It was therefore contended that the extended period of limitation was not applicable and he prayed that the appeals be allowed. 12. Ms. O.M. Reena, Ld. Authorised Representative, appearing on behalf of the Respondent, reiterated the findings in the impugned orders of the respective adjudicating and appellate authority. 13. The issue that arises for consideration is whether the appellants are liable to pay service tax for the period from 01.04.2007 to 31.03.2012, pursuant to the demands confirmed invoking the extended period of limitation, on the allegation that the appellant had provided "Commercial or Industrial Construction Service" as per Section 65 (25)(b) of the Finance Act, 1994 (Act) and "Construction of Complex service" as per Section 65(91a) of the Act as well as whether Mr. Panneerselvam is liable to pay service tax for the alleged renting of immovable property service rendered. 14. We note that the applicable....
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.... place of residence; 65(30a) "construction of complex" means - (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 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; 65(105) (zzzh): "taxable service" means any service provided or to be provided to any person, by any other person, in relation to construction of complex Explanation (Inserted (w.e.f. 01.07.2010 by s. 76 of the Finance Act, 2010 (14 of 2010)- For the purposes of this sub-clause, construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorised by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorised by the builder befor....
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....stipulated therein. That the building or buildings should have more than twelve residential units, should have a common area and should have any one or more of the facilities stipulated therein are cumulative requirements. The definition also states what is excluded. A complex may satisfy all the requirements as stated above, yet if the complex 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, then such a complex is excluded from being considered a "residential complex" under Section 65(91a). From the appeal records, it is also evident from the photographs produced that these are individual houses that were constructed by both the appellants and not building or buildings having more than twelve residential units. Therefore, by virtue of these individual houses not being a building or buildings having more than twelve residential units, they do not satisfy clause (i) of Section 65 (91a) and are therefore straightaway ousted from the ambit of the definition. 12) We find that a view on similar line had earlier been taken by this T....
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.... benefit of the appellants. 14) We are therefore of the considered view that the appellants in both the appeals under our consideration, cannot be considered to have rendered the services of construction of "residential complex", during the period under dispute, so as to come within the ambit of the definitions under Section 65(91a) and Section 65(30a). We therefore hold that the appellants cannot be considered to have rendered a taxable service in relation to construction of complex as stipulated in Section 65(105) (zzzh), thereby rendering the demand made on this count in the impugned OIOs wholly unsustainable." (emphasis supplied) 18. We also find that the very same issue had arisen for consideration of the Chennai bench of the Tribunal in the decision rendered by the Final Order No.40124/2025 dated 27.01.2025 in the Service Tax Appeal No.40609/2014 in the case of M/s. K.B. & Co. v The Commissioner of GST & Central Excise, Tirunelveli, whereby such construction of individual houses in the Tsunami affected areas by Tsunami District Implementation Unit, Pudukkotai (TDIU) were held to be not exigible to service tax. Therefore, respectfully following the aforesa....
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....iven the law laid down in CCE v. Larsen and Toubro reported in 2015 (39) S.T.R. 913 (SC). 20. Furthermore, the appellant PPPL has stated that the construction that they embarked on for the Madurai Municipal Corporation was abandoned at basement level and was incomplete owing to a Court Order of Stay, which remains uncontroverted. We find that there is no evidence relied on in the SCN of any information gathered from the approved plan of the building or civil construction. Therefore, we find that the Department has not let in any evidence that the appellant had carried out the construction of a complex that was primarily for commerce, especially when the onus was on the Revenue to prove that the appellant has constructed such a commercial complex as has been held in the Tribunal decisions cited hereinafter. The principal bench of this Tribunal in the decision in Commissioner of Service Tax, Delhi-III v. Global Civil Projects Ltd, (2025) 28 Centax 240 (Tri-Del) has held as under: "6.8 Above all onus is on department to establish that the building was being used for such purposes by which the organization using the same was making profit. We draw our support from the decis....
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....Kanshiram Hospital was not for commercial purpose. However, as per the said clarification onus was on Revenue to prove that the said building was being used or to be used for making profit. We note that the construction of the building was done during the years 2008-09 and 2009-10 where the show cause notice was issued on 24- 0-2013. We note that for issue of show cause notice Revenue could not give any evidence to establish that the said building was being used for such purposes by which the organization using the same was making profit. Therefore, in terms of the said circular Service Tax was not leviable on the said activity performed by the appellant. Since the Service Tax was not leviable and appellant is succeeding on merit the issue of limitation need not be discussed and decided. 6. In view of the above, we set aside the impugned order and allow the appeal. Appellant shall be entitled for consequential relief as per law." 22. In any event, we find that the appellant has contended that the demand is barred by limitation stating that the Department has not shown any evidence of wilful suppression or misstatement on the part of the appellants whereas the appellant ....