TMI Blog2024 (4) TMI 173X X X X Extracts X X X X X X X X Extracts X X X X ..... he agreements entered into by a builder/promoter/developer with prospective buyers for construction of residential units in a residential complex against payments being made by the prospective buyers in instalments during construction and in terms of which the possession of the residential unit, is to be handed over to the customers on completion of the residential complex and full payment having been made, are to be treated as works contracts, it has to be held that during the period of dispute, there was no intention of the Government to tax the activity in terms of such contracts a builder/developer with prospective customers for construction of residential units in a residential complex. Such works contracts involving transfer of immova ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inance Act, 2012 could be exercised. The penalties imposed on the appellant also cannot sustain - the impugned order set aside - appeal allowed. - Hon ble Shri P. Dinesha , Member ( Judicial ) And Hon ble Shri M. Ajit Kumar , Member ( Technical ) Shri G. Natarajan , Advocate for the Appellant Shri M. Ambe , DC ( AR ) For the Respondent ORDER Per P. Dinesha These appeals are filed by the tax payer against Order-in-Original 31/2012 dated 17.10.2012 and Order in Original No. 121 122/2012 dated 28.11.2012 passed by the Commissioner of Service Tax, Chennai. 2. The case of the Revenue is that during the internal audit of accounts of the assessee, they appeared to have noticed; (a) Non-payment of Service tax on commercial rental income under imm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt in the case of Larsen and Toubro would squarely cover the issue and hence, the demand as confirmed in the impugned orders cannot survive. 4.1 To elaborate further, he would submit that in respect of construction activity undertaken by the appellant, the same was as per the composite contracts/works contracts entered into between the appellant and its customer, which involved both transfer of materials/goods required for construction as well as providing the construction services, which are indivisible in nature and, hence, the same was appropriately classifiable under Works Contract Service. Therefore, going by the decision of Apex Court in Larsen and Toubro (supra), the liability under Works Contract Service would be taxable only from 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... intention of the Government to tax the activity in terms of such contracts a builder/developer with prospective customers for construction of residential units in a residential complex. Such works contracts involving transfer of immovable property were brought within the purview of taxable service by adding explanation to Section 65(105)(zzzh) w.e.f. 1.7.2010, and therefore, it has to be held that such contracts were not covered by Section 65(105)(zzzh) during the period prior to 1.7.2010. ( emphasis supplied ) 8. Further, to tax a particular service, the liability under that head shall only be prospective and not applicable for any period prior to that date, i.e. 01.07.2010 as in the case on hand. Hence, service tax could not be levied und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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