TaxTMI 
TaxTMI 
2024 (5) TMI 416
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....t of the land owner share on 33% after availing abatement. The department was of the view that the appellant has to discharge service tax on the entire amount in respect of land owner share, as they have provided services to land owners under construction of Residential Complex Service, Commercial or Industrial Construction and 'Works Contract Services. 2. It was also noted that the appellant had provided 'Site Formation Service' for which they had not paid service tax appropriately. The appellant had discharged service tax on amounts received from customers for the services provided after availing abatement of 67%. The Department was of the view that the amount received as development charges are in the nature of 'Site Formation Service' and therefore the appellant is not eligible for abatement and has to pay service tax on the entire amount. Thus, SCN dt. 12.12.2011 was issued for the period October 2006 to September 2011 proposing to demand service tax on the land owner share along with interest under "Construction of Residential Complex Service", "Commercial or Industrial Construction Service" as well as "Works Contract Service" The SCN also proposed to demand service tax unde....
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....his personal use, then such activity would not be subjected to service tax, because this case would fall under the exclusion provided in the definition of 'residential complex'. However, in both these situations, if services of any person like contractor, designer or a similar service provider are received, then such a person would be liable to pay service tax." 5.2 It is submitted that the Tribunal in the case of Krishna Homes Vs CCE, Bhopal - 2014 (34) ST.R. 881 (Tri.-Del.) had considered the very same issue and held that a developer/builder/promoter is not liable to pay service tax in respect of construction of residential units even against installment payments. The said decision is followed in CC, CE & Service Tax, Visakhapatnam-I Vs Pragati Edifice Pvt. Ltd. (vice versa) as reported in 2019 (31) G.S.T.L 241 (Tri.-Hyderabad). 5.3 It is submitted that the demand in the present case is made under construction of "Residential Complex Service", "Commercial or Industrial Complex Service" as well as 'Works Contract Service'. The decision in the case of Real Value Promoters Pvt. Ltd. Vs CGST & CE, Coimbatore vide Final Order No.42436-42438/2018 dt. 18.09.2018 and the decision of Ja....
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.... with regard to service tax liability of developer/builder/promoter which clarified that there is no liability to pay service tax. The issue being interpretational in nature, the demand invoking extended period cannot sustain. Ld. Counsel prayed that the appeal may be allowed. 6. Ld. A.R Shri Ambe appeared and argued on behalf of Sri M. Selvakumar. It is submitted by the Ld. A.R that the findings in the impugned order was reiterated by the Ld. A.R. 7. Heard both sides. 8. The first issue that arises for consideration is whether the demand raised under Construction of Residential Complex Service / Commercial or Industrial Construction Service / Works Contract Service on the Land Owner Share is subject to levy of service tax or not. The period involved in this appeal is prior to 1.7.2010. The Board vide its circular noticed above has clarified that developer/builder/promoter is not required to pay service tax on these construction services prior to 1.7.2010. 9. The Tribunal in the case of Krishna Homes has applied Board's circular and discussed the very same issue after taking note of the Explanation introduced in Section 65 (105) (zzzh) of the Finance Act, 1994. The Board has sp....
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.... under Commercial Construction Service. The Tribunal in the case of Real Value Promoters (supra) had held that the demand cannot be raised under CCS, RCS, of CICS for the period prior to 1.7.2012. This view was followed in M/s.Jain Housing Corporation (supra) which has been upheld by Hon'ble Apex Court. The demand of service tax under construction of Residential Complex Services, Commercial Complex Services, or Works Contract Services cannot therefore be sustained and requires to be set aside. Ordered Accordingly. 11. The second issue is with regard to Site Formation Service. There is no case for the Department that appellant is engaged in Site Formation activities. They have collected developer charges from the customers as part of the JV. When the agreement itself is for JV so as to provide construction of residential complex and construction of commercial complex, the demand cannot be raised under Site Formation service by taking out a small amount received as consideration towards construction activities. On the set of facts, the demand cannot sustain. 12. The Tribunal in the case of Hallmark Infrastructure Pvt. Ltd. (supra) had considered the similar issue and discussed as u....