AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2013 (12) TMI 379
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.....12.2008, 12.01.2009, 02.02.2009, 09.07.2009, and 18.08.2009. Unconvinced by such information given by the appellant, lower authorities summoned the Director of SCPL Shri Anish A. Shah to appear and record statement. After recording statements of various persons, it was noticed that SCPL registered themselves under Service Tax registration for discharge of Service Tax liability of construction services in respect of commercial and industrial buildings for different sites. After the detailed investigations, the Revenue authorities found as under:- S.No. Name of Project Nature of Project Activity undertaken Whether service tax paid or otherwise Name of service under which Service Tax paid 1 Akashganga Enclave Commercial Construction carried out by Saumya Engg. (A Div. of Saumya Construction Pvt.Ltd.) Saumya Construction Pvt.Ltd. has undertaken Development activity. Yes. (After 10.09.2004), no Service Tax is paid on Development charges. Construction of commercial service 2 Abhijeet IV Commercial Construction carried out by Saumya Construction Pvt.Ltd. Yes. (From April, 2005....
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....as discharged less Service Tax. The appellant herein contested the show cause notice on various grounds, which were raised in the show cause notice and also contested the issue on limitation. The appellant contested the show cause notice also on the ground that the development charges received by them, cannot be considered as real estate agent services and post 01.06.2007, the appellants are eligible to avail the benefit of Works Contract which was introduced from that date and can shift from Commercial & Industrial Construction services to Works Contract services. 4. The adjudicating authority, after following the due process of law, did not agree with the contentions raised by the appellant and confirmed the demand which was raised, interest thereof and also imposed penalties under various Sections. 5. Ld.Sr.Advocate appearing on behalf of the appellant would take us through the Order-in-Original and submit that the adjudicating authority has totally mis-understood the entire issue and has confirmed the demand without considering any other submissions in proper perspective. It is his submission that the adjudicating authority has totally mis-understood the concept of Service Ta....
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....ich is a plotting scheme and not a residential complex. It is his submission that sometimes after starting the project and doing some activity on scheme, appellant abandoned the project and gives the project to another builder and in all such cases, a lumsum amount is charged for construction already done on the date when the project is transferred to another builder; furthermore, the development rights which is transferred to another builder are also transferred by accepting consideration in lumsum is covered by the judgment reported at 2013 (30) STR 66 in the case of Ratha Holding Co. Pvt. Ltd. Vs. CCE Chennai, wherein it was held that when the right to develop is sold, it is not a service but sale of property as such. Therefore, there cannot be any question of Service Tax. It is his submission that the consideration for sale of unfinished structure is distinct than services, on the date and is actually a sale of immovable property. Hence, it is his submission that as regards to both the commercial and residential construction, the appellant has paid the Service Tax based on his understanding which is clearly supported by law. It is his submission that Hon'ble High Court of G....
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....harged prior to 01.06.2007 as the contract which is entered by the appellant is akin to the works contract and discharge of Service Tax by the appellant for the period prior to 01.06.2007 under the Construction services does not itself preclude the appellant from shifting or changing the classification of the activity of the appellant is covered under the Works Contract services. 6. Ld. Departmental Representative, on the other hand, would take us through the entire Order-in-Original. He would submit that the appellant herein had, in fact, provided real estate consultant services in as much as the appellant herein gave consultancy to the Society for development of land and also advised how to create the plots etc. It is his submission that for such services rendered, the appellant received an amount from the said society or non-trading entity in the guise of development charges. It is his submission that the services provided by the appellant would fall under the category of real estate consultant services. It is the submission that the adjudicating authority has clearly recorded that the payment which is received by the appellant as development charges are correctly classifiable ....
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....to be shown into factual situation of a given case before relying upon such a decision. It is his submission the short payment of Service Tax under commercial and industrial services has been correctly confirmed by the adjudicating authority as the appellant herein, prior to 01.07.2010, was paying the Service Tax under the commercial and industrial construction services and subsequently shifted to services rendered under works contract services, is incorrect proposition of law as CBEC circular prohibits for change of the classification when already for a particular project, the assessee has started discharging Service Tax liability. 7. We have considered the submissions made at length by both sides and perused the records. 8. The issue to be decided by us in this case is:- i) Whether the appellant is liable to discharge Service Tax liability under the category of real estate agent services for the amount received by them as development charges. ii) Whether the appellant is required to discharge the differential Service Tax liability under the head commercial and industrial construction services for the period post 01.06.2007. iii) Whether the appellant has to be denied the ben....
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....amount as a commission. Though the definition of real estate consultant talks about evaluation, construction, design, development, construction, implementation, supervision, maintenance, marketing, acquisition or management of real estate, it has to borne out of the record that such services are rendered. As already stated hereinabove that the appellant herein has not rendered any of the services. On the contrary, he envisaged conceptualized developed, implemented and marketed the scheme/project for himself which is evident from the contract entered by the appellant with the special purpose vehicles. We are of the view that the amount received by the appellant as development charges which are nothing but in the form of profit, will not get covered under the category of real estate agent services. Be that as it may, we find that the creation of special purpose vehicle for execution of projects was classified by the CBEC vide CBEC Circular No.151/2/2012-ST, dt.10.02.2012. We reproduce herein below the precise relevant issue referred to and the clarification given by CBEC. Construction services - Clarifications Sub: Service tax on construction services - Regarding. Many issues have ....
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....No.1550 of 2010, delivered on 22.04.2011 (unreported). Respectfully we reproduce the entire judgment. 1. In this appeal under section 35-G of the Central Excise Act, 1944 (the Act), the appellant, Commissioner of Service Tax, Ahmedabad has challenged the order dated 3.7.2009 made by the Customs, Excise & Service Tax Appellate Tribunal (the Tribunal), proposing to formulate the following two questions: [1] Whether the construction activity being performed/ undertaken by M/s Sujal Developers as a service to M/s Saket-III Cooperative Housing Society and its members, is a taxable activity or not? [2] Whether the Hon'ble CESTAT has committed error in interpreting the Board's Circular No.108/2/009-ST dated 29.1.2009 by not distinguishing the case of Sujal Developers from term 'Developer' mentioned in Board's Circular dated 29.01.2009 quoted supra, wherein Sujal Developers have particularly provided construction services to a housing society and no 'sale' is involved as such? 2. The appellant has filed a consolidated appeal in respect of the common order made by the Tribunal in four appeals. In the circumstances, the present appeal is treated to be an appeal filed in r....
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....rovider and service receiver. In the present case, the refund claimant, namely, the respondent is the service provider and the society and its members are the service receivers since the respondent, the society and its members are separate legal entities. It was submitted that the clarification issued by the Board on which reliance had been placed by the respondent, is that no tax is leviable where 'sale' is involved, whereas in the instant case, there is no 'sale' involved, but the respondent is providing service to the society and its members. Thus, the respondent being the service provider and the society and its members being the service receivers, the respondent had rightly paid the service tax in respect of the services rendered by it. It was submitted that the land in question belongs to the society and that the respondent had not sold the property to the society and its members, but only rendered construction services on the land of the society as per the agreement. In the instant case, the refund claim filed by the respondent had rightly been rejected by the adjudicating authority, as confirmed by the Commissioner (Appeals), and that the Tribunal was not justified in holdi....
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....he Board on 29.1.2001, it was pointed out that the Board had clarified that generally, the initial agreement between the promoters/builders/developers and the ultimate owner is in the nature of 'agreement to sell'. Such a case, as per the provisions of the Transfer of Property Act, does not itself create an interest in or charge on such property. The property remains under the ownership of the seller and it is only after the completion of the construction and full payment of the agreed sum that a sale deed is executed and only then, the ownership of the property gets transferred to the ultimate owner. Therefore, any services provided by such seller in connection with the construction of residential complex till the execution of such sale deed, would be in the nature of self-service and consequently, would not attract service tax. The learned counsel submitted that in the present case, under the terms of the development agreement, the respondent was entitled to retain the full amount of collection received from the members after due payment of cost of land. In the circumstances, the respondent was developing the land and constructing residential buildings thereon which were being ....
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....nits, by engaging a contractor for construction of such residential complex, the contractor shall be liable to pay service tax on the gross amount charged for the construction services provided, to the builder/promoter/developer under construction of complex service falling under section 65(105)(zzzh) of the Finance Act, 1994. It has been further clarified that if no other person is engaged for construction work and the builder/promoter/developer undertakes construction work on his own without engaging the services of any other person, then in such cases in the absence of service provider and service recipient relationship, the question of providing taxable service to any person by any other person does not arise. The Board, in the clarification dated 29.1.2001, which has also been reproduced by the Tribunal in the impugned order, has clarified that generally, the initial agreement between the promoters/builders/developers and the ultimate owner is in the nature of 'agreement to sell'. Such a case, as per the provisions of the Transfer of Property Act, does not itself create an interest in or charge on such property. The property remains under the ownership of the seller (in the in....
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....ould have to be examined before granting refund and also for verification of the correctness of the claim. 13. From the statutory provisions, circulars as well as clarifications issued by the Board referred to hereinabove, it appears that for being chargeable to tax under section 65(105)(zzzh) of the Act is that the person concerned should render service to another person in relation to construction of complex. Thus the basic requirement for falling within the ambit of the said provision is that there has to be a service provider and a service receiver. In the present case as noticed earlier, the land on which the residential complex has been constructed belongs to the society. The society has entered into a development agreement with the respondent. Under the agreement between the society and the respondentdeveloper, the work of construction and development of the housing project has been entrusted to the respondent. The respondent developer has agreed to develop the said land by attending to construction and development work and to complete the scheme duly and diligently on the terms and conditions contained in the agreement. Under the agreement, the developer is required to car....