TaxTMI 
TaxTMI 
2019 (11) TMI 679
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....rvice, the appellant applied for registration under 'Commercial or Industrial Construction Service' and 'Construction of Complex Service' and have since been paying service tax with effect from 16.6.2005 on the considerations received from the customers. The said business of construction and selling of residential apartments are undertaken by the appellant on the land owned by them and also on the land owned by others. In the case of land owned by others, the appellant enter into a Joint Development agreement with the owner in which case after the construction of residential apartment, a fixed percentage of the built up area is given as co-developer share to the owner. In both the cases, appellant initially enter into an agreement with the prospective buyer for sale of the undivided share in the immovable property. Simultaneously also enter into a construction agreement with the prospective buyer. The above two agreements put together amount to sale of residential apartment including the common facility/area as mentioned in the agreement which also describe the appellant's name, floor, door number, etc. Further, as per the agreement, the customers / clients are required to make an ....
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....ice'. 3. Heard both the parties and perused the records. 4. Learned counsel for the appellant submitted that the impugned order is not sustainable in law as the same has been passed without properly appreciating the facts and the law. He further submitted that it is undisputable fact that the entire activity of construction of residential apartment by the appellant is in the nature of indivisible works contract involving transfer of property in goods along with the transfer of service. He further submitted that the appellant has obtained VAT Registration in the State of Karnataka and discharged applicable tax by treating the transaction as works contract. It is his further submission that it is now well settled law that service tax liability on indivisible works contract arises only with effect from 1.6.2007 with the introduction of taxable service of works contract under Section 65(105)(zzzza) in terms of the ratio laid down by the Hon'ble Supreme Court in the case of Commissioner of Central Excise and Cus. Kerala vs. Larsen & Toubro Ltd.: 2015 (39) STR 913 (SC) wherein it has been categorically held that prior to 1.6.2007, there was no charging section to specifically levy ....
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....submitted that the appellants are not providing Health Club and Fitness Centre Service. Primarily the appellants are engaged in the construction and sale of residential flats and as part of the whole plan, the appellant provides the facility of club house and the cost of which is also included in the total value which the appellant charged from the customers. In the construction agreement, the appellants have specified a separate consideration for the club house facility and in the club house, the appellant has also constructed the health and fitness facility. Learned counsel read out the definition of Health and Fitness Centre Service as provided in the Finance Act and also the taxable service as provided under Section 65(105)(zw) and submits that it is not even the case of the Department that the appellants are providing any service for physical wellbeing. The only activity undertaken by the appellant is construction of club house for which the appellants have charged some amount from the prospective owners. Once the club is constructed the same is handed over to the owners association who will manage and operate the said Club. The appellants do not operate the club or provide an....
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....ursable expenses cannot be subjected to service tax. For this submission, he relied upon the following decisions: • Commissioner of Service Tax, Chennai vs. Sngamitra Services Agency: 2014 (33) STR 137 (Mad.) • M/s. S. K. Enterprises Palakkad vs. Commissioner of Customs & Central Excise (Appeals), Calicut: 2008 (10) STR 171 (Tri.-Bang.) SLP of the Department dismissed in Commissioner vs. S.K. Enterprises: 2009 (14) STR J20 (SC) 4.4 He further submitted that Rule 6 of the CENVAT Credit Rules, 2004 is not attracted in the present case because as per the agreement the appellant would construct the apartment on such land and after the construction is over, the land owner will be given fixed number of apartment as his share as a co-developer. 5. On the other hand, the learned AR defended the impugned order and submitted that the appellants have charged from the ultimate customers for these services and therefore, they are liable to pay the service tax on the said services. In support of his submission, Revenue relied upon the decision in the case of Satya Prakash Builders Pvt. Ltd. vs. Commissioner of Central Excise, Jaipur-I: 2017 (4) GSTL 393 (Tri.-Del.....