2011 (3) TMI 1263 - AT - Service Tax

Services of construction of residential complexes - Waiver of pre-deposit - Held that - The Adjudicating Authority while deciding the issue on the merits of the case has clearly held that the ownership of the land still vested with the appellant-herein and necessary permission to carry out construction of residential complexes were issued by the authorities to the appellant. He has also recorded that the relevant record indicates that the appellant had only received the advance from the prospective buyers before completion of the purchase and obtaining any completion certificate from the authorities. In his view only completed flat sold without any receipt of advance is a sale and rest of all would fall under the category of services of residential complexes. Thus not able to agree to this proposition of law as it is very clear from the records that the appellants were the owners of the land and developed the properties and sold the flats to the prospective buyers by entering into different agreements. It is unconceivable that just because the appellant received advances from the prospective buyers the sale could not be considered as sale and would fall under services. We find that the appellant has made out a prima facie case for the waiver of the pre-deposit of the amounts involved

Summary

Issues: Stay petition for waiver of pre-deposit of service tax, interest, and penalties under various sections.

Analysis:
1. The appellant filed a stay petition seeking waiver of pre-deposit of service tax, interest, and penalties amounting to Rs. 37,38,188/- and Rs. 44,03,199/- for different periods, along with penalties under Sections 76, 77, and 78.

2. The Adjudicating Authority confirmed the demand based on the appellant providing "construction of residential complexes" services.

3. The appellant's counsel referred to Board's Circular No. 108/02/2009-S.T. and argued that the services were self-services, not falling under the sale of residential complexes. The counsel highlighted that the appellant took advances, which the Adjudicating Authority misconstrued.

4. The SDR countered by presenting sale agreements showing the appellant's service in constructing residential complexes. Referring to relevant case laws, the SDR argued that the appellant indeed provided services to prospective clients and should deposit the confirmed amounts.

5. The Tribunal analyzed the arguments and found that the appellant, as the landowner, developed and sold flats to buyers through agreements. The Tribunal disagreed with the Adjudicating Authority's view that receiving advances converted sales into services. Consequently, the Tribunal held that the appellant established a prima facie case for waiver of pre-deposit, allowing the application and staying recovery until appeal disposal.