2022 (1) TMI 1126

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....rom January 2009 onwards they stopped paying service tax on the ground that the activities undertaken by them for the construction of residential flats for individuals fall within the clarification issued by the Board vide Circular No. 108/2/2009-ST dated 29.1.2009. The department was of the view that the appellants are liable to pay service tax on the taxable services of construction of residential complex rendered by them. Show Cause Notice demanding service tax for the period January 2009 to January 2010 was issued to the appellant. After due process of law, the adjudicating authority dropped the proceedings initiated in the Show Cause Notice accepting the contention of the appellant that they are not liable to pay service tax. Against s....

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....mpletion 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 service 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. Further, if the ultimate owner enters into a contract for construction of a residential complex with a promoter / builder / developer, who himself provides service of design, planning and construction; and after such construction the ultimate owner receives such property for his personal use, then such activity would not be subject....

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....ginal authority has dropped the demand accepting the contention of the appellant that the Circular issued by the Board dated 29.1.2009 is applicable to the taxable service of construction of individual flats rendered by the appellant. In para 6.9 of the Order in Original, the adjudicating authority after considering the Board Circular dated 29.1.2009 has also looked into the clarification of the Board issued vide Circular No. 151/2/2012-ST dated 16.2.2012. In the said circular, it is stated that prior to 1.7.2010, construction service provided by the builder / developer will not be taxable in terms of Board circular dated 29.1.2009. It was observed in para 6.7 that the appellant had rendered the construction service after selling the land t....

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....zzzh) of section 65(105) would cover only pure service contracts which does not involve any transfer of property in goods. The Tribunal in the case of Real Value Promoters Pvt. Ltd. (supra) following the decision of the Hon'ble Supreme Court held that the demand prior to 2012 cannot sustain under the heads Commercial or Industrial Construction Service, or Construction of Complex Service if the contracts are composite in nature. The relevant paragraph is noticed as under:- "8. In the light of the discussions, findings and conclusions above and in particular, relying on the ratios of the case laws cited supra, we hold as under:- a. The services provided by the appellant in respect of the projects executed by them for the....