Manoharan & Co. Vs Commissioner of Central Excise (CESTAT Chennai)
The CESTAT Chennai considered appeals involving the levy of service tax on construction of residential units (police quarters) executed on a contract basis for the Tamil Nadu Police Housing Corporation. The proceedings had resulted in service tax demands of Rs. 9,22,751 and Rs. 1,22,259, along with interest and penalties, which were confirmed by a common Order-in-Appeal dated 31.12.2012. The Tribunal observed that the issue was fully covered by several earlier CESTAT decisions, including Bismi Engineering Contractors, S. Kadirvel, K. Elango Packiaraj, Sima Engineering Constructions, and Khurana Engineering. It also relied on the CESTAT Chennai decision dated 30.01.2019 in Bismi Engineering Contractors, which categorically held that construction of police quarters falls within the exclusion category and is not liable to service tax. Accordingly, the Tribunal set aside the impugned order and allowed both appeals with consequential benefits as per law.
CESTAT Chennai held that construction of police quarters for the Tamil Nadu Police Housing Corporation is not exigible to service tax, as the issue had already been settled by several earlier Tribunal decisions. The Tribunal noted that a recent decision in Bismi Engineering Contractors had specifically ruled that such construction falls within the exclusion category. Finding no new grounds or reasons to depart from the settled legal position, the Tribunal set aside the Order-in-Appeal confirming service tax demands, interest, and penalties. Consequently, both appeals were allowed, with consequential benefits to follow in accordance with law.
