The Ahmedabad bench of Customs, Excise & Service Tax Appellate Tribunal (CESTAT) has held that Service Taxis not leviable on the Construction of complex services in relation to Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awaas Yojana.
MS Khurana Engineering Limited, the appellant during the period under consideration were engaged in the business of construction of residential Complex services under Jawaharlal Nehru National Urban Renewal Mission (JnNURM). All the projects executed by the Appellant under the JnNURM scheme pertained to the construction of the House for Economic Weaker Section (EWS)
The said project under the JnNURM scheme was executed by the Appellant for Ahmedabad Municipal Corporation (AMC) and Ahmedabad Urban Development Authority (AUDA) only. As per the department service tax on “Construction of Complex Service” was leviable under Sub-Section (105)(zzzh) of Section 65 of the Finance Act, 1994 with effect from 16.06.2005.
The services provided by Appellant under the JnNURM scheme fell under the category of “Construction of Complex Service”. Further, the Government of India vides Notification No. 28/2010 dtd. 22.06.2010 exempted the taxable services of construction of complex referred to in sub-clause (zzzh) of clause (105) of section 65 of the Finance Act, when provided to Jawaharlal Nehru National Urban Renewal Mission of (JnNURM) and Rajiv Awas Yojana, from the whole of the service tax leviable thereon under Section 66 of the Finance Act w.e.f. 01.07.2010.
The services provided by the Appellant under the category of “Construction of Complex Service‟ for the JnNURM Project were taxable up to 01.07.2010. The Appellant was issued a show cause notice for demanding Service Tax along with interest and penalty which was confirmed by the impugned order in original.
It was contended that upon the introduction of the Service tax on residential complex services, there was no clarity in the field. The Appellant sought clarification from AUDA and AMC regarding the discharge of service tax liability; in response to which AUDA referred the matter to the Commissioner of Service tax on 06.12.2006. AUDA has specifically sought clarification as any service tax liability arises on AUDA or otherwise.
It was evident that the complex is constructed with the intention for personal use as a residence by a person who is directly engaging any other person for designing/planning of layout and the construction of such complexes out of the ambit of such construction and thus from taxability.
A Coram consisting of Mr Ramesh Nair, Member (Judicial) Mr Raju, Member (Technical) observed that the quarters/residential complexes were got constructed by the AMC and AUDA for urban poor people for their residential use, the same amounts to “personal use”. The confirmation of demand for these services by the Commissioner is held to be not sustainable.
The Bench held that the construction service was provided to Jawaharlal Nehru National Urban Renewal Mission and Rajiv Awaas Yojana and the service tax is not leviable to such a project. The appeal was allowed with consequential relief.
Shri Devan Parikh, Advocate with Shri Nirav Shah appeared for the Appellant and Shri Ghanasyam Soni appeared for the Revenue.
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