2012 (8) TMI 814

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....r the appellant's agreement with their customers. The department was of the view that the appellant have provided the service of "construction of complex" taxable under Section 65(105)(zzzh) read with Section 65(30a) and 65(91a) of the Finance Act, 1994. It is on this basis that a show cause notice dated 1-1-08 was issued to the appellant for demand of allegedly non-paid service tax amounting to Rs. 3,87,279/- for the period from- 16-6-05 to 31-7-06 along with interest and also for imposition of penalty on them. The show cause notice was adjudicated by the Jurisdictional Deputy Commissioner vide order-in-original dated 8-2-2010 by which the service tax demand, as made in the show cause notice, was confirmed against them along with interest ....

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....ngaging a contractor for construction of such residential complex, the contractor in his capacity as provider of taxable service to the builder/promoter/developer shall be liable to pay service tax on the gross amount charged for the construction service so provided and that if the builder/promoter/developer undertakes the construction work himself, in absence of service provider and service recipient relationship, the question of providing taxable service by the builder/developer/promoter to any other person does not arise and pleaded that same instructions have been reiterated in Board's Circular No. 108/02/09-S.T., dated 29-1-09. He, therefore, pleaded that in view of these Circulars of the Board, service tax cannot be demanded from the ....

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.... the Finance Act, 2010. Moreover, we find that it is only w.e.f. 1-7-2010, that explanation was added to Section 65(zzzh) of the Finance Act, 1994 providing that for the purpose of this sub-clause, construction of a complex which is intended for sale; wholly or partly, by a builder or any person authorized by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of prospective buyer by the builder or a person authorized by the builder before the grant of completion certificate by the authorized competent to issue such certificate under any law for the time being in force, shall be deemed to be service provided by the builder to the buyer. This legal fiction introduced by explanation....