TMI Blog2018 (9) TMI 1518X X X X Extracts X X X X X X X X Extracts X X X X ..... pleted flats to the buyers. To our minds, the activities undertaken do not merit classification under works contract services. The activity will be covered under works contract service only when the contract is entered into by the appellant only for construction of residential complex on land owned by someone else. The CBEC Circular dated 29/01/2009 bring out the position clearly that in the activity undertaken by the appellant in building a residential complex, there will be no liability to pay service tax under the category of construction of complex service. The position changed only w.e.f. 01/07/2010 when an explanation was added to sub-Section (zzzh), making such activity to be a deemed service - Thus the activity of the appellant, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... construction of residential units on its own land. They enter into an agreement to sell with the prospective buyers of the apartments. In terms of such agreements, payments are received as per the agreed schedule. After completion of the construction, the appellant transfers the residential apartments to the buyers by way of a registered sale deed. The dispute covers the period April 2007 to March 2011. Pursuant to the audit conducted by the department, the department issued show cause notice dated 23/10/2012 alleging that the activity undertaken by the appellant, in the form of construction of the residential apartments, fell within the category of works contract service defined under Section 65 (105) (zzzza) and under such category, ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... category, after availing the abatement under the relevant notification. He also referred to the clarification dated 10/02/2012 in which it has been clarified that prior to 01/07/2010 no service tax will be liable to be paid under this category ; (ii) He relied on the decision of the Hon‟ble Bombay High Court in the case of Maharashtra Chamber of Housing Industry vs. Union of India 2012 (25) S.T.R. 305 (Bom.), wherein it has been held that the explanation included w.e.f. 01/07/2010 is not clarificatory and hence prospective only. He further relied on the Tribunal decision in the case of Aarti Infrastructure and Buildcon vs. CCE, Raipur 2018 (3) TMI 1245 CESTAT NEW DELHI, where in identical circumstances the Tribunal has set asid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clarified constantly by Revenue that no service has been provided by the builder, while building residential complex on his own. The situation changes only after the deeming fiction inserted w.e.f. 01/07/2010. He also referred to the decision of the Hon‟ble Guwahati High Court in the case of Magus Construction Private Limited vs. Union of India 2008 (11) S.T.R. 225 (Gau.), wherein the Hon‟ble High Court has approved the view circulated by CBEC vide their circular dated 01/08/2006 to the effect that no service is rendered by the builder who constructs complex on his own. 8. Heard both sides and perused the record. 9. The appellant is engaged in construction of residential units on its own land. After acquiring the land f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to be decided is whether the activity of the appellant will fall under the former or latter category. The key to the decision is in the fact that the construction activity has been carried out by the appellant on the land which is acquired and owned by the appellant. The appellant has carried out design, planning, development of their own land and carried out the construction and transferred the completed flats to the buyers. To our minds, the activities undertaken do not merit classification under works contract services. The activity will be covered under works contract service only when the contract is entered into by the appellant only for construction of residential complex on land owned by someone else. 11. The appellant has el ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s such property for his personal use, then such activity would not be subjected to service tax, because this case would fall under the exclusion provided in the definition of residential complex‟. However, in both these situations, if services of any person like contractor, designer or a similar service provider are received, then such a person would be liable to pay service tax . 12. The clarifications issued by CBEC bring out the position clearly that in the activity undertaken by the appellant in building a residential complex, there will be no liability to pay service tax under the category of construction of complex service. The position changed only w.e.f. 01/07/2010 when an explanation was added to sub-Section (zzzh), maki ..... X X X X Extracts X X X X X X X X Extracts X X X X
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