M/s Tirathdas Shaukat Rai Construction Pvt. Ltd. Vs. CCE (CESTAT Delhi)
1. The appellant is aggrieved by the order dated 8thAugust, 2012 of Commissioner of Central Excise (Appeals), Indore. The appellants are engaged in construction activities. The dispute in the present appeal relates to two main activities of the appellant, namely construction of residential units for Indore Municipal Corporation under Jawaharlal Nehru National Urban Renewal Mission Scheme for ecomically weaker sections. The second activity is with reference to development of plots for accommodation of people in slum locality under Valmiki Awas Mission- Baba Saheb Ambedkar Yojana for economically weaker sections as developed by Government of Madhya Pradesh. The lower Authorities held that the appellants are liable to pay Service Tax under the category of Construction of Residential Complex Service.
2. Contesting the findings of the lower Authorities the Ld. Counsel appearing for the appellant submitted that both these activities are outside the preview of tax entry. There is a specific exemption under Notification 28/2010 ST dated 22/06/2010 for construction under JNNURM Scheme. Regarding the second activity there is no construction at all in this, only development of cleared slum area for further use for improvement and construction. They are not involved in construction units under the said scheme.
3. The Ld. AR reiterated the findings of the lower Authority.
4. We have heard both sides and perused the appeal records.
5. We note that the Ld. Counsel drew our attention to the Original order dated 28/03/2016 passed by Commissioner of Central Excise, Indore dealing, among other things, these two activities of main contractor who is their sister concern. In the said order the Commissioner categorically held against the tax liability on the reasons now pleaded by the Ld. Counsel.
6. After hearing both sides we note that the construction of residential units for EWS JNNURM for Indore Municipal Corporation is clearly covered by exemption Notification 28/2010 ST dated 22/06/2010. On the second issue we note that the appellants are not engaged in any construction of residential units. They were mainly engaged in development of plots in the slum locality in terms of an arrangement with main contractor for Government of Madhya Pradesh. We note while dealing with the said contract in respect of tax liability of the main contractor of the appellant the Original Authority recorded the fact to the effect that there was no construction of residential complex and as such no tax liability will arise. The Ld. Counsel categorically stated that the contract does not involve the construction of any residential units. It is only for development of slum area for plotting etc.
7. In view of above analysis we note that the tax liability against the appellant cannot be sustained. Accordingly the impugned order is set aside and the appeal is allowed.