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TMI Blog2008 (12) TMI 633X X X X Extracts X X X X X X X X Extracts X X X X ..... constructed by them on the land belonging to some others on joint venture agreement basis. The Additional Commissioner, Central Excise, Mangalore relied upon the agreement of some of the completed residential apartments between the land owner, the appellant (promoter) and the buyer and this reads as follows : "Whereas the immovable property more fully described in schedule 'A' here bellows to B. Mariyamma absolutely, she having acquired the same as per the terms of sale deed dated 12-7-1984 registered as document No. 535/84-85 in the office of the Sub registrar of Mangalore City and ever since then she has been holding and enjoying the said property with actual possession as absolute owner thereof, AND WHEREAS the said B. Mariyamma approached the promoter herein and negotiated for joint development and the terms in this regard having mutually agreed upon, They have entered into Joint Development agreement dated 11-5-2005. In terms of the said agreement the said B. Mariyamma executed Power of attorney in favour of the Vendor herein and accordingly the Vendor has commenced construction of the proposed multi storied apartment building in the 'A' schedule property. The vendor herein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent schedule of Plama Elite Apartments is as under : Total amount to be paid : Rs. 15,00,000/ The amount paid by the Purchasers : Rs. 2,25,000/- The Balance amount of Rs. 12,75,000/- payable as hereunder (a) After completion of First slab Rs. 1,09,000/- (b) After completion of Second slab Rs. 1,09,000/- (c) After completion of Third slab Rs. 1,09,000/- (d) After completion of Fourth slab Rs. 1,09,000/- (e) After completion of Fifth slab Rs. 1,09,000/- (f) After completion of Sixth slab Rs. 1,09,000/- (g) After completion of Seventh slab Rs. 1,09,000/- (h) After completion of Eighth slab Rs. 1,09,000/- (i) After completion of Nineth slab Rs. 1,09,000/- (j) After completion of Tenth slab Rs. 1,09,000/- (k) After completion of Eleventh slab Rs. 1,09,000/- (l) While handing over the Flat with power Connection Rs. 76,000/- 3. The Additional Commissioner held that the appellant had received amounts from the buyers as advance to construct residential complex. He held the appellant as service provider and confirmed demand of service tax of Rs. 2501428/- + Cess of Rs. 50028/- along with interest. He also imposed penalty @ Rs. 200/- under Section 76. H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2/35/2006-TRU, dated 1-8-2006. • The appellant submitted that they had engaged independent contractors for the actual construction of building for principle to principle basis, if at all there was liability to pay service tax it was on the contractors who were actually rendering the service to the appellant. • The appellant further relied upon Board's recent Master Circular No. 96/7/2007-S.T., dated 23-8-2007. • The appellant also contested the extended period and stated that there were no concrete evidence in the impugned order to justify extended period of limitation. • The appellant had also contested various penalties imposed under Sections 76, 77 and 78. 4. During the personal hearing the appellant brought to my notice decision of Hon'ble Gohatti High Court reported in 2008 (11) S.T.R. 225. The appellant also gave copies of the agreement under which the contractors were appointed to carry out the construction works, civil and architecture. From the department side Shri P.T. Rai, Superintendent relied upon the Ruling given by the Authority for Advance Ruling in M/s. Harekrishna Developers cited as 2008 (10) S.T.R. 341. 5. I have carefully gone through ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Wakf Board v. Abdul Aziz (A.I.R. 1968 Madras 79, 81 paragraphs 8 and 10, following and approving Nitai Charan Bagchi v. Suresh Chandra Paul (66 C.W.N. 767), Shyam Lal v. M. Shyamlal (A.I.R. 1933 All. 649) and 76 Corpus Juris Secudum 621. Assuming that the investments in shares and in lands do not form part of the undertakings but are different subject matters, even then, these would be brought within the purview of the vesting by reason of the above expressions. In this connection reference may be made to 76 Corpus Juris Secundum at pages 620 and 621 where it is stated that the term "relate" is also defined as meaning to bring into association or connection with. It has been clearly mentioned that "relating to" has been held to be equivalent to or synonymous with as to "concerning with" and "pertaining to". The expression "pertaining to" is an expression of expansion and not of contraction." (emphasis supplied) In the division Bench decision of the Madras High Court referred to by the Supreme Court, the words "in every suit or proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n para 19 the court defined the definition of service which reads as follows; 19. By the Finance Act, 2005, the definition of "construction service" was amended. With the amendment, so introduced, Section 65(30a), now, reads as under : "(30a) 'construction of complex' means -- (a) construction of a new residential complex or apart thereof; or (b) completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex." 11. Para 29, 30 and 31 are being reproduced below; 29. In the light of the various statutory definitions of "service", one can safely define "service" as an act of helpful activity, an act of doing something useful, rendering assistance or help. Service does not involve supply of goods; "service" rather connotes transformation of use/user of goods as a result of voluntary intervention of "service provider" an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be required to pay whole of the price at a time. From the condition so incorporated in the relevant agreement for sale, it cannot be inferred that the petitioner-company is making construction for and on behalf of the probable allottees or purchasers. 13. In para 38 the court held as follows; 38. The quoted portions of the abovementioned circular make it very clear that the activities of the petitioner-company do not fall within the purview of "taxable service" so as to attract levy of "service tax". In Commissioner of Income-tax v. Aspinwall and Co. Ltd. (1993) 204 ITR 225, the Kerala High Court has held that a circular of the Central Board of Direct Taxes has the force of law and can even supplant the law in the cases, where it is beneficial to the assessee and has mitigated or relaxed, the rigour of the law. 14. The Hon'ble Gauhati High Court had also taken into account Board's Circular No. 332/35/2006 dated 1st August, 2006 and held that in terms of the above mentioned Circular the activities carried out by the petitioner company did not fall within the purview of taxable service so as to attract levy of service tax. Para 48 of the decision is reproduced below; 48. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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