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TMI Blog2011 (4) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... ujal Developers from term 'developer' mentioned in Board's circular dated January 29, 2009 quoted supra, wherein Sujal Developers have particularly provided construction services to a housing society and no 'sale' is involved as such?" The appellant has filed a consolidated appeal in respect of the common order made by the Tribunal in four appeals. In the circumstances, the present appeal is treated to be an appeal filed in respect of the show-cause notice dated January 17, 2007 which culminated into the order-in-original dated December 31, 2007, rejecting the refund claim of Rs. 74,970. The respondent-Sujal Developers, a partnership firm which is engaged in construction activities, entered into an agreement with Saket III Co-operative Housing Society (hereinafter referred to as, "the society") for development of a piece of land owned by the society on April 21, 2005. In relation to development of the said land, the respondent paid service tax in the category of "construction of complex" for various periods. The present appeal pertains to the service tax paid for the period October 1, 2005 to October 31, 2005. Later on the respondent filed a refund claim on January ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... htly paid the service tax in respect of the services rendered by it. It was submitted that the land in question belongs to the society and that the respondent had not sold the property to the society and its members, but only rendered construction services on the land of the society as per the agreement. In the instant case, the refund claim filed by the respondent had rightly been rejected by the adjudicating authority, as confirmed by the Commissioner (Appeals), and that the Tribunal was not justified in holding that the transaction in question was not a taxable transaction. It was submitted that in the circumstances, the appeal gives rise to a substantial question of law, as proposed or as may be formulated by the court. Opposing the appeal, Mr. S. N. Soparkar, learned senior advocate appearing for the respondent invited attention to the agreement for development between the society and the respondent, to submit that under the said agreement the respondent had not been engaged as a contractor for constructing residential premises for the society ; and that under the said agreement the respondent had been assigned all the rights to develop the said land and sell the resid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the construction of residential complex till the execution of such sale deed, would be in the nature of "self-service" and consequently, would not attract service tax. The learned counsel submitted that in the present case, under the terms of the development agreement, the respondent was entitled to retain the full amount of collection received from the members after due payment of cost of land. In the circumstances, the respondent was developing the land and constructing residential buildings thereon which were being sold to the members by the respondent and as such, the service rendered by the respondent was in the nature of self-service and consequently, the same would not attract service tax. It was submitted that the impugned order of the Tribunal being just, legal and proper and in consonance with the statutory provisions as well as the clarification issued by the Board, does not warrant interference and as such the appeal deserves to be dismissed. Sub-section (105) of section 65 of the Finance Act, 1994 defines "taxable service" to mean any service enumerated thereunder. The taxable service as provided under clause (zzzh) thereof is "to any person, by any other pers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice recipient relationship, the question of providing taxable service to any person by any other person does hot arise. The Board, in the clarification dated January 29, 2001, which has also been reproduced by the Tribunal in the impugned order, has clarified that "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 itself create an 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 provided by such seller in connection with the construction of residential complex till the execution of such sale deed would be in the nature of 'self-service' and consequently would not attract service tax. Further, if the ultimate owner enters into a contract for construction of a residential complex with a promoter/buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent case as noticed earlier, the land on which the residential complex has been constructed belongs to the society. The society has entered into a development agreement with the respondent. Under the agreement between the society and the respondent-developer, the work of construction and development of the housing project has been entrusted to the respondent. The respondent-developer has agreed to develop the said land by attending to construction and development work and to complete the scheme duly and diligently on the terms and conditions contained in the agreement. Under the agreement, the developer is required to carry out every act necessary to complete construction and development of the project directly or indirectly, which includes preparation and approval of plans, getting the buildings constructed directly or by sub-contracting and/ or purchase of material, hiring labour, arrangement of finance, marketing and advertising the project, enrol members, collect money, etc. The respondent is permitted to use the property in question for the purposes mentioned in the agreement. The respondent is entitled to construct and/ or arrange to construct the building as per the plan an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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