Custom, Excise & Service Tax Tribunal
Amit Kumar Jain vs Raipur on 10 September, 2018
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL,
WEST BLOCK NO.2, R.K. PURAM, NEW DELHI-110066
BENCH-DB
COURT - I
Service Tax Appeal No. ST/59244/2013 [DB]
[Arising out of Order-in-Appeal No. 5-ST-RPR-II-2013 dated
15/05/2013 passed by the Commissioner (Appeals), Central
Excise, Raipur-II]
Amit Kumar Jain ...Appellant
Vs.
C.C.E. & S.T.-Raipur ...Respondent
Present for the Appellant : Mr. Abhishek Jaju, Advocate Present for the Respondent: Mr. Sanjay Jain, DR Coram: HON'BLE MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) HON'BLE MR. BIJAY KUMAR, MEMBER (TECHNICAL) Date of Hearing/Decision 10.09.2018 FINAL ORDER NO. 53019/2018 PER: ANIL CHOUDHARY Heard both the parties. The issue is whether the appellant who have admittedly constructed row houses, where each house/block contains only one unit, for the Government of Chhattisgarh, through Chhattisgarh Housing Board, whether they are liable to pay service tax under the category of Construction of Residential Complex Service under Section 65(91a).
2
ST/59244/2013 [DB]
2. Admitted fact is that the appellant have constructed residential houses under contract to Chhattisgarh Housing Board which was later handed over to Government for allocation by Ministry of Housing and Poverty Alleviation, Government of India for bidi making labourers who are below poverty line. Such houses are further admittedly provided to such labourers free of cost.
3. The Ld. Assistant Commissioner while adjudicating the Show Cause Notice held that the activity is not taxable under Construction of Complex Service recording the following findings:
"I find that the Noticee were engaged in the construction of 254 nos. of residential houses at Post Bajrangpur, Village Navagaon, Rajnandgaon for bidi making labours, which were provided free of cost under the scheme of Central Government "Ministry of Housing and Urban Poverty Alleviation" of the Government of India and got implemented through CPWD as well as through the State Government, i.e. Chhattisgarh Housing Board (CGHB), Raipur to Bidi making labours who are covered under BPL at free of cost.
It is thus clear that services rendered by the contractor/ notice is altogether different from commercial angle rather it is construction undertaken of residential 3 ST/59244/2013 [DB] houses under welfare scheme of Government of bidi making labours in the vicinity of Rajnandgaon.
In this regard, I find that the para 13.2 of Circular No. 8010/2004-ST dated 17.09.2004 issued by the Joint Secretary, TRU, CBEC, New Delhi states that "the leviability of service tax would depend primarily upon whether the building or civil structure is "used or to be used" for commerce or industry. The information about this has to be gathered from the approved plan of building or civil construction. Such constructions which are for the use of organizations or institution being established solely for educational, religious, charitable, health, sanitation or philanthropic purposes and not for the purposes of profit are not taxable being non commercial in nature. Generally, government buildings or civil constructions are used for residential, office purposes or for providing civic amenities. Thus, normally government constructions would not be taxable. However, if such constructions are for commercial purposes like local government bodies getting shops constructed for letting them out, such activity would be commercial and builders would be subjected to service tax."
4. Being aggrieved with the Order of the Assistant Commissioner dropping the demand, Revenue went in Appeal before Commissioner (Appeals) who vetted the impugned order after taking the notice of the facts and the Circular F. No. 332/16/2010 - TRU dated 24.05.2010 held that the appellant is working as a sub-contractor and the main contractor is the Chhattisgarh Housing Board and accordingly they shall be 4 ST/59244/2013 [DB] liable to pay service tax under the said category of Construction of residential Complex Service.
5. Heard the parties. We find that it is an admitted fact that the appellant have constructed individual row houses and not a residential complex having 12 or more units/ flats. Under such circumstances, we find that there is no case of construction of residential complex as defined under the statute wherein residential complex have been defined as - a building or buildings having 12 or more residential units in each block and also having common facilities like lift, water supply, sanitation, etc. Further, we find that the issue herein is squarely covered by this Tribunal in NCR Builders Pvt. Ltd. Vs. C.C.E. & S.T., Ghaziabad 2017 (3) GSTL 198 (Tri.-All.). Further, we find that the Commissioner (Appeals) have erred in holding that the appellant is liable to pay service tax as a sub-contractor. It has been held by Hon'ble Patna High Court in the case of Hindustan Dorr Oliver Ltd. Vs. State of Bihar reported at 75 sales tax cases (page 211) wherein the Hon'ble High Court have held that there is one transaction/ one sale. The work may be done by sub contractor or main contractor. There is no two sale, one from the sub contractor to the main contractor and again from the main contractor to the consumer. We find that the same analogy applies to the service tax provisions as the service component 5 ST/59244/2013 [DB] of such transaction are in question for the levy of service tax. Accordingly, we allow this Appeal and set aside the impugned order. The appellant is allowed consequential benefit which shall follow.
[Dictated and pronounced in the open Court] (BIJAY KUMAR) (ANIL CHOUDHARY) MEMBER (TECHNICAL) MEMBER (JUDICIAL) D.J.