The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the works contract service of construction of residential complex for Jawaharlal Nehru Urban Renewal Mission (JnRUM) was not liable to service tax being not a commercial in nature.
H K Ramani, the appellant assessee was engaged in the construction of a residential complex in respect of the works contract for the construction of a residential complex under the Jawaharlal Nehru Urban Renewal Mission Scheme for Surat Municipal Corporation.
The assessee appealed against the order passed by the Commissioner (Appeals) for confirming the demand of service tax imposed for the construction service on the assessee.
Hardik V Vohra, the counsel for the assessee contended that in the case of Santosh Katiyar Vs. Commissioner of Central Excise, the court held that the construction service was provided to Jawaharlal Nehru National Urban Renewal Mission and Rajiv AwaasYojana and the service tax were not leviable to such a project.
A.K Somata, the counsel for the department relied on the decisions made by the lower authorities and contended that the demand raised by the revenue was as per the law and liable to be sustained.
The Bench observed that in the case of Cemex Engineers v. Commissioner of Service Tax Cochin, the court held that the definition of residential complex services and works contract services and had come to the conclusion that since the construction of a new residential complex was included in the definition of a works contract, the construction of a residential complex based on the works contract, cannot be leviable to service tax.
The two-member bench comprising Ramesh Nair (Judicial) and Raju (Technical) quashed the demand for service tax while allowing the appeal filed by the assessee.
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