TaxTMI 
TaxTMI 
2026 (1) TMI 1228
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....thapuram. 2. Briefly stated the facts of the case are that during the relevant period dated 01.04.2009 to 31.03.2010, the appellant provided services under the taxable category of 'Construction of Residential Complex Service' and 'Works Contract Service'. Show-cause notice was issued to the appellant on 20.10.2010 for recovery of Rs.3,71,22,691/- along with interest and penalty. On adjudication, the demands were dropped. Aggrieved by this order, Revenue is in appeal. 3. Learned Authorised Representative (AR) for the Revenue has reiterated the grounds of appeal. 4. At the outset, the learned counsel for the respondent submitted that levy of service tax on 'Construction of Residential Complex Service' for the period in dispute has be....
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....service tax under the WCS prior to March 2009 but discontinued to pay service tax for the period March 2009 to June 2010 referring to the Circular dated 29.01.2009. However, on going through the show-cause notice and the order of the learned Commissioner, nowhere it has been brought on record that the respondent had been paying service tax from 01.06.2007 to February 2009 under the WCS. In the show-cause notice, it is alleged that the amount received by the appellant during the period March 2009 to June 2010 as recorded in their financial records not suffered service tax even though they have rendered the WCS. On going through the sample agreement placed by the respondent during the course of argument between the respondent and one Mr. Just....
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....omoter 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. The 'Construction of Complex' service has been defined under Section 65 (105)(zzzh) of the Finance Act as "any service provided or to be provided to any person, by any other person, in relation to construction of a complex". The 'Construction of Complex' includes construction of a 'new residential complex'. For this purpose, 'residential complex' means any complex of a building or buildings, having more than twelve residential units. A complex constructed by a person directly engaging any other person for designing or planning of the layo....
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.... 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 wou....
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....re two important transactions are identifiable : (a) sale of land by the landowner which is not a taxable service; and (b) construction service provided by the builder/developer. The builder/developer receives consideration for the construction service provided by him, from two categories of service receivers: (a) from landowner: in the form of land/development rights; and (b) from other buyers: normally in cash. (A) Taxability of the construction service : (i) For the period prior to 1-7-2010 : construction service provided by the builder/developer will not be taxable, in terms of Board's Circular No. 108/2/2009- S.T., dated 29-1-2009 [2009 (13) S.T.R. C33]. (ii) For the period after 1-7-2010, construction servic....
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....ion to Section 65(105)(zzzh) w.e.f. 1-7-2010, and therefore, it has to be held that such contracts were not covered by Section 65(105)(zzzh) during the period prior to 1-7-2010." (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....