Service
tax can be demanded under section 65(105)(zzzh) only if the building
concerned has more than 12 residential units in the building and such levy will
not apply in cases where in one
compound has many buildings, each having not more than 12 residential units.
Therefore, we set aside the impugned order and allow the appeal.
CESTAT, NEW DELHI BENCH
A.S. Sikarwar
v.
Commissioner of Central Excise,
Indore
FINAL ORDER NO. ST/A/375/2012-CUS
APPEAL NO. ST/871 OF 2011
APRIL 20, 2012
ORDER
Mathew John, Technical Member –
In this case, the Appellants have undertaken construction work of 15 residential houses under a contract with
M.P. Housing Board. The Revenue
was of the view that the Appellants should have paid service
tax on the activity under the entry 65(105)(zzzh) for taxing
‘construction of complex’ as defined under section 65(91a) of Finance Act, 1994.
The submission of the appellant is that the entry covers only such building
where each of the building has got more than 12 residential units. They have
built 15 independent houses and not a complex and hence their activity was not
taxable under the entry
65(105)(zzzh) which adopts definition in section 65(91a). He relied upon the
decision of the Tribunal in the case of Macro Marvel Projects Ltd. v.
CST [2008] 17 STT 479 (Chennai – CESTAT)
2. The Authorised Representative
appearing for the Revenue submits that the explanation
under section 65(91a) of Finance Act, 1994 gives definition of “residential unit” to mean “a house or single apartment intended for use as a
place of residence”. Even if the residential units are separate, it will be
covered by the definition, according to him.
3. The A.R. further submits that
the decision in the case of Macro Marvel Projects Ltd. (supra)
was with reference to the entry for works
contract under sections 65(105)(zzzza) of Finance Act, 1994 whereas the
present case is in respect of construction of residential complex under entry
65(105)(zzzb). He also points out that the Tribunal in para 2 of the order has
observed as under :-
“These observations of ours with reference to
‘works contract’ have been occasioned by certain
specific grounds of this appeal and the same are not intended to be a binding
precedent for the future.”
4. We have considered arguments
on both sides. We find that the definition of
residential complex as per section 65(91a) of Finance Act, 1994 is applicable
for both the entries under section 65(105)(zzzh) for levy of tax on construction of residential complex as also for
entry under section 65(105)(zzzza) for works contract.
Therefore, there cannot be an argument that the expression ‘residential complex’
has to be interpreted in one manner for works contract
and in a different manner for levy of tax on
construction of a residential complex.
5. We further note that
Revenue being aggrieved by the decision of the
Tribunal in the said matter had filed appeal with the Hon’ble Supreme Court and
the Hon’ble Supreme Court has dismissed the appeal filed as reported at 2012
(25) J514 (SC). So we consider that this matter is no longer res
integra and service tax can be demanded under
section 65(105)(zzzh) only if the building concerned has more than 12
residential units in the building and such levy will not
apply in cases where in one compound has many
buildings, each having not more than 12 residential units. Therefore, we set
aside the impugned order and allow the appeal.
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