TaxTMI 
TaxTMI 
2026 (9) TMI 183
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....ed 29.01.2009, hence demanding service tax for this period, show cause notice was issued to the respondent. The Commissioner in the impugned order after considering the above Circular and the Circular No.151/02/2012 ST dated 10.02.2012 and various judgements held that builders are eligible for exemption from payment of service tax for the period up to 30th June 2010. He also held that since the amount received after 1/7/2010 is also part and parcel of the said project which has been completed before 01/07/2010, the entire receipt comes under the scope of exemption in terms of Board Circular dated 10.02.2012, thus dropped the entire service tax demanded in the show-cause notice along with the penalty but confirmed those amounts that were collected and deposit during the said period along with interest. Similarly in appeal No.ST/21173/2013, the Commissioner vide impugned Order-in-Original No.12/2013 dated 25.03.2013 dropped the demand based on the above Board Circulars and various decisions. Aggrieved by this dropping of demands as demanded in the show-cause notices, the Revenue is in appeal against both the above orders before this Bench. Since the issues involved are common in both....
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.... Board Circulars and the Explanation introduced from 01.07.2010 onwards. In an identical set of facts, this bench in the case of M/s. Sobha Developers Ltd. Vs. Commissioner of Central Excise and Service Tax, Bangalore has held as follows: "5. Heard both sides. Since in both these appeals issues are common the same are disposed of by a common order. The main issue in these appeals since the appeal periods are between February 2009 to May 2010, they are not liable to discharge service tax in view of the Board Circular No.108/02/2009-ST dated 29.01.2009 and Circular No. 151/2/2012-ST dated 10.02.2012. The Commissioner in the impugned orders has denied the benefit of the above circular only on the ground that it is applicable only to the services provided by the service providers under 'construction of residential complex service and not to the service providers under 'works contract service. This issue is no longer relevant in as much as the liability to pay service tax prior to 01.07.2010 is settled by various decisions of the Tribunals and in one such case in the case of Commissioner of Customs, Central Excise and Service Tax, Visakhpatnam-I Vs. Pragati Edifice Pvt.....
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.... being in force, but does not include a complex which is constructed by a person directly engaging any other person for designing or planning of the layout, and the construction of such complex is intended for personal use as residence by such person". There is no dispute that the complex constructed by both the assessees in these appeals are covered by the definition of "residential complex" as given in Section 65(91a). There is also no dispute that both the assessees had engaged contractors for construction of the complexes. The dispute in these appeals is as to whether the assessees would be liable to pay Service Tax on the amounts charged by them from their customers with whom they had entered into agreements for construction of the residential units and whose possession was to be handed over on completion of the construction and full payment having been made by the customers. It is seen that on this point, the Tax Research Unit of the Central Board of Excise & Customs, which is a wing of the C.B.E. & C. dealing with legislation work, had vide Circular No. 332/35/2006-TRU, dated 1-8-2006 clarified that in case where a builder, promoter, developer builds a residential complex ha....
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....om.), the validity of the 'Explanation' added to Sections 65(105)(zzq) and (zzzh) was challenged on several grounds. The Bombay High Court, also considered the issue whether the explanation was prospective or retrospective in operation and ruled that the explanation inserted by the Finance Act, 2010 brings within the fold of taxable service a construction service provided by the builder to a buyer where there is an intended sale between the parties whether before, during or after construction; that the 'Explanation' was specifically legislated upon to expand the concept of taxable service; that prior to the explanation, the view taken was that since a mere agreement to sell does not create any interest in the property and the title to the property continues to remain with the builder, no service was provided to the buyer; that the service, if any, would be in the nature of a service rendered by the builder to himself; that the explanation expands the scope of the taxable service, provided by builders to buyers pursuant to an intended sale of immovable property before, during or after the construction and therefore the provision is expansive of the existing intent and not clarificat....