TMI Blog2018 (11) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... quired to pay service tax on the services allegedly rendered by them during the relevant period - appeal allowed - decided in favor of appellant. - Appeal No. ST/1915/2010 - A/31197/2018 - Dated:- 27-8-2018 - Mr. M.V. Ravindran, Member (Judicial) And Mr. P. Venkata Subba Rao, Member (Technical) Shri P. Venkata Prasad, CA (Representative) for the Appellant. Shri V.R. Pavan Kumar, Superintendent/AR for the Respondent. ORDER Per: P.V. Subba Rao. 1. This appeal has been filed against the Order-in-Appeal No. 49/2010 (H-II) ST dated 29.04.2010. 2. Heard both sides and perused the records. The appellant is a builder of residential complexes and had obtained registration with the service tax department. He sold u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vity by a builder prior to 01.07.2010 is liable to service tax and b) Whether interest and penalties are imposable. 5. It is his contention that this issue is no longer res integra and it has been settled by the Board vide Circular Nos. 108/2/2009-ST dated 29.01.2009 and 151/2/2012-ST dated 10.02.2012. He would draw our attention to the circular dated 10.02.2012 in Para 2.1 it has been clarified that for the period prior to 01.07.2010: construction services provided by builder / developer will not be taxable in terms of Board Circular No.108/2/2009-ST dated 29.01.2009. He also relied on the case of Krishna Homes [2014 (34) STR 881 (Tri-Del)] in which it was held as follows: 9. In view of the above, though in view of the Apex Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the contents of Para 3 of above Circular dated 29-1-2009 are quoted below : 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 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he record that the relevant period was April, 2008 to September, 2008 which is prior to 01.07.2010 and the service provided was construction of residential complex by the builder which, as clarified by the CBEC in their circular dated 10.02.2012 (supra) was not taxable during the relevant period. This position was also held in the orders of the Tribunal in the case of Krishna Homes (supra), UB Constructions (supra) and Vinayaka Homes (supra). Thus, we find that the legal position is settled and the appellant was not required to pay service tax on the services allegedly rendered by them during the relevant period. Consequently the interest and penalty are also liable to be set aside. We, therefore, find that the appeal is liable to be allowe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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