Site formation tax applies to development done for another person; self-development of owned land is not taxable.

Site formation and clearance tax applied where development was undertaken for consideration for another person, but not where land was outright purchased and merely self-developed before resale without any separate service element. For land held under a power of attorney arrangement, the Tribunal treated the arrangement as agency, not transfer of title, and found that the appellant could not claim self-service; the development charges for levelling, earth filling, road laying and boundary marking were taxable as site formation and clearance service. The Tribunal also upheld extended limitation and penalty on the basis of suppression and misstatement. The demand was therefore sustained for the GPA-linked activity, while self-development on outright purchases was excluded from tax.

---

---

Issues: (i) Whether service tax was payable on land purchased outright by the appellant and self-developed before resale, under the category of Site Formation and Clearance service. (ii) Whether service tax was payable on land dealt with by the appellant under a power of attorney arrangement, where development activity was undertaken before sale, under the category of Site Formation and Clearance service.

Issue (i): Whether service tax was payable on land purchased outright by the appellant and self-developed before resale, under the category of Site Formation and Clearance service.

Analysis: The taxable entry covered services rendered in relation to site formation, clearance, excavation, earthmoving and demolition. Where the appellant purchased land outright and carried out development only on land under its own control, without any separate consideration from a buyer for such activity, the activity was treated as self-development and not as a service rendered to another person. On the facts, the Tribunal also noted absence of evidence that the particular outright purchases formed part of the demand based on separate development charges.

Conclusion: In favour of the assessee. No service tax was payable on self-developed outright purchases.

Issue (ii): Whether service tax was payable on land dealt with by the appellant under a power of attorney arrangement, where development activity was undertaken before sale, under the category of Site Formation and Clearance service.

Analysis: A power of attorney was held to create an agency and not transfer title. Section 53A of the Transfer of Property Act, 1882 was held not to confer ownership. The appellant therefore could not claim self-service in respect of land held under GPA arrangements. The agreement and surrounding material showed a separate consideration for development, including ground levelling, earth filling, road laying and boundary marking, which fell within the inclusive definition of site formation and clearance. The Tribunal also upheld invocation of the extended period and penalty on the ground of suppression and misstatement.

Conclusion: In favour of the Revenue. Service tax was payable on the development activity undertaken under the GPA arrangement.

Final Conclusion: The appeal failed overall, with the demand sustained for the GPA-linked development activity while the principle of self-development on outright purchased land was accepted.

Ratio Decidendi: Site development carried out for consideration for another person falls within the taxable service of site formation and clearance, while mere self-development of one's own land without service to another does not.

---