Case Law Details
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.
FULL TEXT OF THE CESTAT CHENNAI ORDER
After hearing both sides, we find that the issue in dispute concerns liability to service tax in respect of services of construction of residential units (police quarters) to Tamil Nadu Police Housing Corporation on contract basis. Proceedings initiated against the appellant on this score resulted in demands of Rs.9,22,751/- and Rs.1,22,259/- with interest and imposition of penalties under various provisions of law which have been confirmed by a common Order-in-Appeal dt. 31.12.2012 (impugned order). We find that the issue in dispute is fully covered by the decisions relied upon by including the one cited by the Ld. Advocate namely —
1. Bismi Engineering Contractors and Other Vs CCE & ST Madurai 2013-TIOL-1583-CESTAT-MAD.
2. S. Kadirvel Vs CCE & ST Tiruchirapalli 2013-TIOL-594-CESTAT-MAD.
3. K. Elango Packiaraj Vs CCE Madurai 2014-TIOL-742-CESTAT-MAD.
4. Sima Engineering Constructions & Others Vs CCE & ST Trichy 2013-TIOL-721-CESTAT-MAD.
5. Khurana Engineering Vs CCE Ahmedabad – 2010-TIOL-1712-CESTAT-AHM
We also note that in a very recent decision of CESTAT Chennai in the case of Bismi Engineering Contractors & Others Vs CGST & Central Excise, Madurai vide Final Order No.40195-40197/2019 dt. 30.01.2019 involving the very same issue, it has been categorically held that construction of such quarters for police personnel will fall under exclusion category and would not be exigible to service tad. We do not find any new grounds or reasons to deviate from this ratio. This being so, the impugned order to the contrary cannot then sustain and requires to be set aside, which we hereby do. Both the appeals are allowed with consequential benefits, if any, as per law.
(dictated and pronounced in court)
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