2025 (1) TMI 1207

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.... was engaged in rendering Construction of Residential Complex Service. The department alleged that the Appellant is liable to pay service tax on the amounts received as consideration from Customers towards rendering the said service. Therefore, a show Cause Notice (SCN) dated 18.08.2010 was issued to the Appellant proposing to demand duty of Rs.2,47,585/- for the period from April 2009 to June 2010, under 73 (1) of the ACT ibid, along with applicable interest, besides proposing to impose penalty under Section78. Upon adjudication, the demand was confirmed, and equal penalty was imposed. Aggrieved, the Appellant filed an appeal before the lower Appellate authority who vide the Order-in-Appeal had confirmed the demand while passing on cum-duty benefit to the Appellant but set aside the penalty imposed. Hence the present appeal preferred by the Appellant before this forum. 3. The main contentions of the Appellant as evident from the Grounds of Appeal have been summarised below: - i. There was no legality in the impugned order as the same jurisdictional appellate authority had issued an order on the same issue, which was contrary to the impugned order. It is submitted that ....

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....cisions: - a) Kehsva Ravji & Co. Vs. CIT [1990 (183) ITR/1/49 Taxman 87 (SC)] b) KP Vargehese Vs. ITO [131 ITR 597/7Taxman 13 (SC)] c) Ranaday Micronutirents Vs. CCE [1996 (10) SCC 387] d) CCE Vs. Dhiren Chemcial Industries [2002 (2) SCC 127] e) CCE Vs. Maruti Foam P Ltd. [2004 (6) SCC 722] f) Paper Products Ltd. Vs. CCE [1997 (7) SCC 84] g) CIT Vs. Ramaniah & Sons [1986 (157) ITR 300 (1985) 22 Taxman 128 (AP HC)] 4. The Ld. Consultant Shri V. Prasanna Krishnan for the Appellant reiterated the contentions in the grounds of appeal and further submitted that on the same issue involving the Appellant the Tribunal had earlier decided the matter in favour of the Appellant vide Final Order No. 40112/2019 dated 17.01.2019 and hence the demand is not sustainable. Further reliance was placed by the Ld. Counsel on the decision in the case of M/s. Krishna Homes Vs. CCE, Madurai [2014 (34) STR 881 (Tri.-Del.)]. 5. The Ld. Authorised Representative Smt. O.M. Reena for the Revenue affirmed the findings of the Lower Appellate Authority and submitted that the Appellant was liable to pay service tax under the category of Construct....

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....n after 1.6.2007, service tax on such composite contracts would not be sustainable under Residential Complex Services or Commercial or Industrial Construction Services. For this reason, the demand made under Construction of Residential Complex cannot sustain and requires to be set aside, which we hereby do. The decision in G.D. Builders (supra) relied by department is prior to the decision of Apex Court in Larsen and Toubro (supra). The Larger Bench of Tribunal relied upon G.D. Builders case to hold that composite contracts can be vivisected and service tax can be levied. This decision of Larger Bench of Tribunal was overruled by Apex Court. Therefore, G.D. Builders (supra) is no longer good law. This Tribunal in BCC Developers and Promoters Pvt. Ltd. (supra) has not taken note of the decision of Apex Court in Larsen & Toubro (supra)". Construction of Residential Complex service - Service tax liability of builders, promoters, developers and contractors clarified. 10. The Ld. Counsel for the Appellant has contended that the impugned order has ignored the CBEC Circular dated 29.10.2009. We find it expedient to refer to the Service Tax Circular 108/2/2009-S.T., dated 29.01.2009 ....

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....t even if it is taken that service is provided to the customer, a single residential unit bought by the individual customer would not fall in the definition of 'residential complex' as defined for the purposes of levy of service tax and hence construction of it would not attract service tax. 3. The matter has been examined by the Board. 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. Further, if the ultimate owner....