TaxTMI 
TaxTMI 
2022 (4) TMI 706
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....the investigation a Show Cause Notice dated 07.09.2009 was issued to the Appellant demanding Service tax under Section 73(1) of the Finance Act, 1994 along with interest under Section 75 of the Act and proposing penalty under Section 76, Section 77 and Section 78 of the Act. The Adjudicating Authority adjudicated the case vide OIO dated 28.03.2018 and dropped the proceedings initiated against the Appellant. Aggrieved by the said order, Department filed appeal before the Commissioner (Appeals), and Learned Commissioner (A) has allowed the department's appeal by way of remand for quantification of demand. Hence, the present appeal. 3. Shri Pankaj Rachchh learned Counsel Appearing on behalf of the Appellant submits that Learned Commissioner (Appeals) has travelled beyond the scope of Show Cause Notice as well as grounds of appeal filed by department. It was not issue before him that whether explanation under clause (zzq) of sub-section(105) of Section 65 of the Finance Act, 1994 with effect from 01.07.2010 is of clarificatory nature and always retrospective nature or otherwise? He has grossly erred in finding the explanation are clarificatory in nature and does not introduce new ta....
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....65(25b) inserted with effect from 16.06.2005, Explanation inserted under clause (zzq) and clause (zzzh) of Section 65(105) with effect from 01.07.2010, circulars dated 17.09.2004, 27.07.2005, 29.01.2009, 26.02.2010, 01.07.2010, 10.02.2012 and also following decisions on the subject case. (i) Magus Construction Pvt. Ltd. Vs. UOI- 2008(11) STR 225 (Gau.). (ii) Commissioner of Service tax vs. Sujal Developer - 2013 (31) STR 523(Guj) (iii) Saumya Construction Pvt. Ltd. Vs. CST, Ahmedabad- 2016(STR) 723 (Tri. Ahmd) 7. He further submits that levy of Service tax on "Construction Service" was introduced with effect from 10.09.2004 and same was defined under Section 65(30a) of the Finance Act, 1994. As per the said definition, "Construction Service" means construction of new building or civil structure or a part thereof which is used, or to be used, primarily for; or occupied, or to be occupied, primarily with; or to be engaged, primarily in, commerce or industry. 8. The said definition at clause (30a) of Section 65 was substituted by new definition with effect from 16.06.2005 " Construction of Complex" means construction of a new residential complex or par....
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....he construction is over. 8.6 In order to achieve the legislative intent and bring in parity in tax treatment, an Explanation is being inserted to provide that unless the entire payment for the property is paid by the prospective buyer or on his behalf after the completion of construction (including its certification by the local authorities), the activity of construction would be deemed to be a taxable service provided by the builder/promoter/developer to the prospective buyer and the Service tax would be charged accordingly. This would only expand the scope of the existing service, which otherwise remain unchanged." 10. He also submits that CBEC had at the time of enactment of Finance Bill, 2010 on 08.05.2010 again clarified that vide Finance Act, 2010 eight new services were added to the list of taxable service while scope of nine existing services were modified. As these changes became effective from 01.07.2010, activities that are covered under taxable service categories due to above addition or modifications would start attracting services from this date. The said Circular at paragraph 6.1 and 6.2 further clarified that "6.1 In the Finance Act, changes hav....
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....n a case where developer/ builder/promoter enters into an agreement, with the ultimate owner for selling a dwelling unit in a residential complex at any stage of construction (or even prior to that) and who makes construction linked payment had inter-alia 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 by itself create any interest in or charge on such property. The property remains under the ownership of the seller (in the instant case, the promoters/builders/developers). 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 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.----------." The above clarification clearly states that levy of Service tax was on contrac....