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TMI Blog2012 (8) TMI 561X X X X Extracts X X X X X X X X Extracts X X X X ..... land, the Appellant get the remaining 50% share of the property against their contribution of working capital. The flats of the complexes, which were in the appellant's share, were sold by them. The department's contention is that the Appellant's activity attracts Service tax under Section 65(105)(zzzh) read with Section 65(30a) and 65(91a) of the Finance Act, 1994 and while during the period of dispute i.e. from 1-4-2004 to 31-3-2008, the appellant received an amount of Rs. 1,86,88,256/- on which Service tax payable was Rs. 6,86,719/-, in the ST-3 Return filed by them, they declared taxable value as Rs. 43,88,143/- on which they paid Service tax of Rs. 1,73,015/- only and thus, there was short payment of Service tax to the tune of Rs. 5,17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid to be taxable services under Section 65(105)(zzzh) as this has become taxable services only by the Finance Act, 2010 when an Explanation was added to Section 65(105)(zzzh) providing that for the purpose of this sub-clause, construction of flats which is intended for sale, wholly or partly, by a builder or any person authorised by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorised by the builder before the grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer, that in view of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the submissions from both the sides and perused the records. In this case, Service tax is demanded on the amount received on sale of the flats which were in the appellant's share in terms of their agreement with the land owners. According to the department, these flats had been constructed against flats purchase agreement with the prospective buyers and this amounts to providing the construction of residential complexes by the appellant to the flat buyers which is taxable under Section 65(105)(zzzh) of the Finance Act, 1994. However, we find that the Hon'ble Gauhati High Court in the case of Magus Construction Pvt. Ltd. (supra) has clearly held that this activity is not a service and the amount received by a developer/builder from the buy ..... X X X X Extracts X X X X X X X X Extracts X X X X
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