TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1225
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....ervices (CRCS for short) as defined u/s. 65(91a) of the Finance Act, 1994 but did not pay the service tax for the disputed period from 10/2008 to June/2010. Based on the same, a Show Cause Notice No 480/2010 dated 09.09.2010 came to be issued proposing to recover the service tax for the services of "construction of Residential complex service" along with applicable interest and penalty. 2. The Appellant upon receipt of the SCN, filed a reply assailing it on the grounds of merits and well as on limitation during adjudication and thereafter, Order-in- Original No. 01/2012 S.Tax /Ch-IV dated 10.01.2012 was issued by the Additional Commissioner confirming the demand of Service Tax of Rs.6,13,867/- under the category of construction of residential complex service along with interest and imposed penalty under Section 76 of the Finance Act, 1994. 3. Aggrieved with the above order, the Appellant approached the first appellate authority, and the Commissioner (Appeals II), Chennai vide his order No 212/2015 (STA-II) dated 25.08.2015 upheld the demand of Service Tax along with interest but dropped the penalty imposed under Section 76 of FA 1994 as there was no intention to evade tax and as ....
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....operty Developers Vs. Commissioner of GST & CE vide Final Order No. 41107-08/2023 dated 08.12.2023 wherein this Tribunal has followed the decision of the Hon'ble Supreme Court in Jain Housing and Construction Ltd. and set aside the orders on the ground of mis- classification. 6.6 The Finance Act, 2010 has for the first time brought developers into the ambit of service w.e.f. 01.07.2010 through the introduction of Explanation to 65(105)(zzzh) and hence there is no question of service tax on developers prior to 01.07.2010. The explanation clearly states that "a builder or any person authorized by the builder shall be deemed to be service provider by the builder to the buyer". Therefore, there is no liability to pay service tax prior to 01.07.2010 as a developer. 6.7 The Tribunal in the case of Krishna Homes vs CC [2014 (34) STR 881] has held (Para 9) that during the period of dispute there was no intention of the Government to tax the activity in terms of agreements between the builder/developer and the prospective customers for the construction of residential units against payments made in instalments, in terms of which possession of the residential unit is to be handed over t....
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....or planning of the layout, and the construction of such complex is intended for personal use as residence by such person. Explanation. - For the removal of doubts, it is hereby declared that for the purposes of this clause, - (a) "personal use" includes permitting the complex for use as residence by another person on rent or without consideration; (b) "residential unit" means a single house or a single apartment intended for use as a place of residence; 65(30a) "construction of complex" means - (a) construction of a new residential complex or a part thereof; or (b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex; 65(105) (zzzh): "taxable service" means any service provided or to be provided to any person, by any other person, in relation to construction of complex Explanation (Inserted w.e....
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.... works contract. Therefore, there cannot be an argument that the expression residential complex has to be interpreted in one manner for works contract and in a different manner for levy of tax on construction of a residential complex. 9.3 The appellant contended that the ownership of the land has been transferred and construction service continued thereafter to each land owner vide separate construction agreement and the same was considered by the CBEC Circular No. 108/02/2009-ST dated 29.01.2009 wherein it was clarified that any service provided by a 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 appellant further contended that an Explanation was inserted with effect from 01.07.2010 to the definition of Construction of residential/commercial complex and the same would apply only prospectively. 9.4 We have perused the OIO and OIA, and find that there is no discussion that the services provided by the Appellant will be under WCS, but straightaway came to the conclusion based on the definitions and construction model of the Appellant th....
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....sue of taxability either under CCS or WCS has been laid to rest by a catena of orders of various Benches of the CESTAT, wherein the decision of the Hon'ble Apex Court in the case of Commissioner of Central Excise & Customs, Kerala v. M/s. Larsen & Toubro Ltd. [2015 (39) S.T.R. 913 (S.C.)] has been followed, to hold that Service Tax would be chargeable only after 01.07.2010 in respect of developers under the head CCS if service simpliciter is involved and under the head WCS if it is a composite works contract. 9.8 The Appellant has submitted that the Hon'ble High Court of Madras in the case of Jain Housing Vs. CST in CMA No. 3289 of 2013 and 1419 to 1421 of 2014 though it was against the pre-deposit order of the Tribunal has observed as follows at para 20: - "20, Consequent to the sale of the undivided share, the ultimate owner, namely the prospective buyer, comes into play and as per the second portion of paragraph (3) of the circular dated 29.01.2009, if the ultimate residential complex with a promoter, builder. or developer, who himself provides service of design, planning and construction, and after such construction the ultimate owner receives such property for his perso....
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....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 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." From the construction model adopted by the builder/promoter as seen from the Appeal records, we find that the developer/builder is not liable to pay the Tax. 9.10 It is well settled legal position that whether the service is rende....
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....ice recipient and the service provider is engaged only for provision of construction service), a composite construction activity would fall only under WCS. As contended by the Ld. Advocate, we agree that the service rendered by the Appellant is in the nature of WCS 10. The Learned Advocate for the appellant has referred to the findings of the coordinate Hyderabad Bench of the CESTAT in the case of Commissioner of Customs, Central Excise and Service Tax, Visakhapatnam-I v. M/s. Pragati Edifice Pvt. Ltd. [2019 (31) G.S.T.L. 241 (Tri. - Hyderabad)], wherein it has been held as under: - "(n) To sum up, as far as construction of 'residential complexes' by the builders are concerned: (i) Prior to 1-6-2007, if it is a composite works contract, no Service Tax is leviable in view of the judgment of the Hon'ble Apex Court in the case of Larsen & Toubro (supra). (ii) After 1-6-2007, it is chargeable as 'works contract' only if it is a composite contract and under 'construction of complex services' if it is a service simpliciter. (iii) However, after 1-6-2007 but prior to 1-7-2010, whether it is a service simpliciter or a works contract, if the service is rendered prior to issue of c....
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....if the services rendered are in the nature of composite works contracts, they cannot be charged to Service Tax prior to 1-6-2007 and can be charged post this date only under this head 65(105)(zzzza) and not under any other head. (ii) In the case of M/s. Krishna Homes v. CCE, Bhopal and CCE, Bhopal v. M/s. Raj Homes as reported in 2014 (3) TMI 694-CESTAT, Ahmedabad, the scope of taxing 'Composite Works Contracts' rendered in connection with construction of complex services prior to 1-7-2010 was examined. 'Construction of complex services' was covered in Section 65(105)(zzzh) and in this clause an explanation was added w.e.f. 1-7-2010. This reads as follows: (zzzh) to any person, by any other person, in relation to construction of complex; "Explanation. - For the purposes of this sub-clause, the construction of a new building which is intended for sale, wholly or partly, by a builder or any person authorized by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or the person authorized by the builder before grant of completion certificate by the authority competent to issue s....