2022 (4) TMI 706 - AT - Service Tax

Construction of residential and commercial complexes - service tax registration not obtained - non-payment of service tax - period in dispute is 2004-2005 to 2008-09 - explanation added by the Finance Act, 2010 in Section 65(105)(zzzh) of the Finance Act, 1994 - HELD THAT:- Prior to 1-7-2010 builders/developers are not liable to pay service tax for the Construction Service and in the present case, the period involved is from 2004-2005 to 2008-09. Consequently, it is held that the impugned order is not sustainable in law.

In the case of COLLECTOR OF C. EX., VADODARA VERSUS DHIREN CHEMICAL INDUSTRIES [2001 (12) TMI 3 - SUPREME COURT], the Apex Court held that We need to make it clear that regardless of the interpretation that we have placed on the said phrase, if there are circulars which have been issued by the Central Board of Excise and Customs which place a different interpretation upon the said phrase, that interpretation will be binding upon the Revenue.

In COLLECTOR OF CENTRAL EXCISE, MEERUT VERSUS MARUTI FOAM (P) LTD. [2004 (1) TMI 328 - SUPREME COURT], the Apex Court held that the construction of statutory phrase, placed by a circular issued by the Central Board of Excise and Customs, although different from the one placed by the Supreme Court, was binding on the Revenue till the same was withdrawn.

It becomes clear that the circular, is binding on the department and this circular makes it more than abundantly clear that construction service provided by the builder/developer will not be taxable for the period prior to 01.07.2010 - Appeal allowed - decided in favor of appellant.