Custom, Excise & Service Tax Tribunal
Shivanssh Infrastructure Development ... vs Secunderabad - G S T on 10 October, 2025
(1)
ST/25807 & 26535/2013
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Division Bench - Court No. - I
Service Tax Appeal No. 25807 of 2013
(Arising out of Order-in-Original No. 23/2012-ST-HYD-III-Adjn (Commnr) dt.14.12.2012
passed by Commissioner of Customs, Central Excise & Service Tax, Hyderabad-III)
M/s Shivanssh Infrastructure
Development Pvt Ltd ......Appellant
Plot No.83, D.No.3-83, SuvarnaSadan,
Hastinapuri Colony, Sainikpuri, Hyderabad - 500 094
VERSUS
Commissioner of Central Tax
Secunderabad - GST
Kendriya Shulk Bhavan, LB Stadium Road,
......Respondent
Basheerbagh, Hyderabad - 500 004 and Service Tax Appeal No. 26535 of 2013 (Arising out of Order-in-Original No. 04/2013-ST-HYD-III-Adjn (Commnr) dt.19.03.2013 passed by Commissioner of Customs, Central Excise & Service Tax, Hyderabad-III) M/s Shivanssh Infrastructure Development Pvt Ltd ......Appellant Plot No.83, D.No.3-83, SuvarnaSadan, Hastinapuri Colony, Sainikpuri, Hyderabad - 500 094 VERSUS Commissioner of Central Tax Secunderabad - GST Kendriya Shulk Bhavan, LB Stadium Road, ......Respondent Basheerbagh, Hyderabad - 500 004 Appearance Shri K. Vijay Kumar, Advocate for the Appellant. Shri K. Raji Reddy, AR for the Respondent.
Coram: HON'BLE MR. A.K. JYOTISHI, MEMBER (TECHNICAL) HON'BLE MR. ANGAD PRASAD, MEMBER (JUDICIAL) FINAL ORDER No. A/30399-30400/2025 Date of Hearing: 23.06.2025 Date of Decision: 10.10.2025 [Order per: A.K. JYOTISHI] M/s Shivanssh Infrastructure Development Pvt Ltd (hereinafter referred to as appellant) are in appeal against the Order-in-Original dated (2) ST/25807 & 26535/2013 14.12.2012 passed by the Commissioner pursuant to SCN dt.04.04.2012 for the period June, 2007 to March, 2011 in Appeal No. ST/25807/2013. They are also in appeal against the Order-in-Original dt.19.03.2013 passed by the Commissioner pursuant to SCN dt.10.09.2012 for the period April, 2011 to March, 2012 in Appeal No. ST/26535/2013.
2. The facts, in brief, are that the appellants had undertaken construction of Married Accommodation Project for Military Engineering Services (MES), which involved construction of residential quarters for military personnel during the period January, 2007 to March, 2011 and also for the period April, 2011 to March, 2012. The department felt that they have provided taxable services under the category of 'Construction of Residential Complex Service' (CRCS) under section 65(105)(zzzh) of the Finance Act, 1994 during the period January, 2007 to May, 2007 and under 'Works Contract Service' (WCS) under section 65(105)(zzzza) during the period June, 2007 to March, 2012.
3. Learned Advocate for the appellant has mainly submitted that the issue is no longer res integra in view of the decision of Bangalore Bench of the Tribunal in the case of M/s Vishal Infrastructure Ltd Vs CST, Bangalore [Final Order - 20333/2024 dt.02.05.2024], wherein, it was, inter alia, held that since the residential complex is for personal use by the military and therefore, clearly excluded from the definition under section 65(91a) and especially, in view of the fact that layout does not require any approval by an authority under any law. He also submitted that as held by the Chennai Bench of the Tribunal in the case of M/s Raga Foundation Vs CCE, Chennai [2019 TIOL 493 - CESTAT Mad.], it was, inter alia, held that while construction of new residential complex as service simpliciter would find a place under section 65(105)(30b) of the Act, the same activity as a composite works contract will require to be brought under section 65(105)(zzzza) explanation (c). Further, it was held that for both these categories for the definition of residential complex, the definition given in section 65(105)(91a) will have to be adopted. He has also relied on CBEC clarification vide Circular dt.05.07.2006, wherein, it was clarified that the service tax was not applicable on construction of residential quarters for Army personnel as the layout does not require approval by an authority under any law. He has also submitted that demand is barred by limitation (3) ST/25807 & 26535/2013 and that in any case for the period prior to 01.07.2010, such activities are not leviable to service tax as held by this Tribunal in the case of Commissioner Vs Pragati Edifice [2019-TIOL-3095-CESTAT Hyd].
4. On the other hand, learned AR has mostly reiterated the findings of the adjudicating authority.
5. Since issues in both the appeals are common, we are taking up both the appeals together for disposal.
6. Heard both sides and perused the records.
7. The short question in both these appeals is that whether construction services provided either in the category of CRCS or in the category of WCS would be leviable to service tax during the relevant period or otherwise in the given factual matrix. The admitted position is that the projects were initially awarded by the MES to M/s Maytas Infra Pvt Ltd and M/s Ramky Infrastructure Ltd, who in turn outsourced the said construction to the appellants. It is also an admitted position that the department has raised demand under CRCS for the period prior to 01.07.2007 and under WCS post 01.07.2007. The adjudicating authority has considered the submissions, however, felt that in this case, service provider required certain sanctions of the competent authority in terms of Cantonment Act, 2006 and therefore, did not consider the clarification issued by the Board for non-levy of service tax in the given factual matrix. He also took into account the fact that the appellants were sub-contractor of M/s Maytas Infra Pvt Ltd and M/s Ramky Infrastructure Ltd, who were given the contract for construction and also the fact that it was clearly held that service tax applicable, if any, would be borne by M/s Maytas Infra Pvt Ltd and M/s Ramky Infrastructure Ltd. Insofar as giving the benefit of material portion for the purpose of computing service tax, the adjudicating authority observed that since they had not given the value separately for the service and material portions, the benefit of Notification No.01/2006 was not extended for allowing the abatement.
8. We find there is force in the findings of the Commissioner that they are not the contractors who were providing services to the Army personnel and they were providing services to their main contractors M/s Maytas Infra Pvt Ltd and M/s Ramky Infrastructure Ltd and therefore, they were liable to (4) ST/25807 & 26535/2013 pay service tax. We find that in the case of CST, New Delhi Vs Melange Developers Private Limited [2020 (33) G.S.T.L. 116 (Tri. - LB)], the Larger Bench of this Tribunal has considered the issue of payment of service tax by a sub-contractor to the main contractor keeping in view the various judgments in this regard and, inter alia, held that they are required to pay service tax. Further, it was also held that during the period there were various issues and confusion, whereby it could not be said that there was any deliberate attempt not to pay the service tax. We also note that clearly it is a case where there can be bonafide belief that they were providing services to MES and also that there was no service tax liability on the services provided to MES as clarified by the Board, as also by the Bangalore Bench in the case of M/s Vishal Infrastructure Ltd Vs CST, Bangalore (supra). Hence, invocation of extended period as well as imposition of penalty was not upheld. It is also noted that in Appeal No.ST/26535/2013, on the similar issue for subsequent period, imposition of penalty again under section 78 would not sustain. We also note that irrespective of service being under CRCS or WCS, no service tax is leviable prior to 01.07.2010 as held in the case of Pragati Edifice (supra), as also in catena of judgments of this Bench as well as Coordinate Benches. Therefore, no demand can sustain for the period prior to 01.07.2010. For the period post 01.07.2010, the demand would sustain for the normal period only and penalty would not be invokable under section 78.
9. With these directions, the matter is remanded back to the original adjudicating authority only for the limited purpose of re-computing the demand of service tax and interest, if any.
10. Appeals are allowed partly by way of remand.
(Pronounced in the Open Court on 10.10.2025) (A.K. JYOTISHI) MEMBER (TECHNICAL) (ANGAD PRASAD) MEMBER (JUDICIAL) Veda