Appeal allowed for works contract service on property development for sale pre-2010

The Tribunal allowed the appeal, overturning the confirmation of demand for works contract service related to the construction of residential complexes on the appellant's property developed for sale. It held that the development of one's own property for sale does not constitute a taxable service before 1.7.2010, aligning with established legal principles and precedents. The Tribunal emphasized the prospective application of the explanation to Section 65(105) (zzzh) and set aside the Commissioner's decision, ruling in favor of the appellant.

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Issues:
- Appeal against order-in-Appeal No. 68/2013 dated 28.6.2013
- Confirmation of demand for works contract service for construction of residential complexes
- Interpretation of sub-clause(c) of Explanation (ii) of Section 65(105) (zzzza) of the Finance Act, 1994
- Effect of the explanation inserted in Section 65(zzzh) from 01.07.2010
- Liability of service tax for construction of complex intended for sale to prospective buyers

Analysis:
The appellant filed an appeal against order-in-Appeal No. 68/2013 dated 28.6.2013, challenging the confirmation of demand for works contract service related to the construction of residential complexes on the appellant's property developed for sale. The demand was confirmed by the Commissioner, Central Excise and Customs, Raipur for a significant amount apart from interest and penalties. The issue revolved around whether the development of one's own property for sale to prospective purchasers falls within the ambit of works contract service under sub-clause(c) of Explanation (ii) of Section 65(105) (zzzza) of the Finance Act, 1994, introduced w.e.f. 01.06.2007. The Commissioner had upheld the demand based on this interpretation.

The Tribunal delved into the interpretation of the relevant provisions and legal precedents. It noted that the phrase 'Construction of a new Residential Complex or part thereof' was not explicitly defined in the clause but was enumerated as a taxable service. The Tribunal highlighted the insertion of an explanation in Section 65(zzzh) from 01.07.2010, which expanded the scope of taxable construction of complex service to include transactions where construction is undertaken for sale and advances are received from prospective buyers before the grant of a completion certificate.

Referring to past judgments such as Maharashtra Chamber of Housing Industry vs. Union of India and Magus Construction Pvt. Ltd. vs. Union of India, the Tribunal emphasized that the explanation to Section 65(105) (zzzh) should be applied prospectively. It concluded that development and construction of one's own property would not constitute a taxable service before 1.7.2010 as per the relevant section of the Finance Act. Therefore, the Tribunal set aside the impugned order and allowed the appeal, aligning with the established legal principles and precedents in this matter.

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