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TMI Blog2024 (7) TMI 477X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Authority confirmed levies against the appellant. Aggrieved by the said order, present appeal is filed. 2. When the matter was taken up for hearing Learned Counsel reiterated the grounds of appeal and submitted that they were registered under the category of 'Construction of Residential Complex Service' and started paying service tax on abated value for the period from December 2005 to August 2006. Thereafter as per the clarification issued vide TRU Circular No.332/35/2006-TRU dated 01.08.2006 they have discontinued paying service tax. Thereafter, when works contract was brought under the ambit of service tax with effect from 01.06.2007, Appellant again started paying service tax under composition scheme from June 2007 to March 2008. Thereafter, when Circular 108/02/2009-ST dated 29.01.2009 clarified that the developers/builders are not liable for payment of service tax, they have discontinued payment of service tax. The learned counsel also submitted that they have informed the above facts regularly with the periodical letters to department. The Learned Counsel further submitted that the appellant was not liable to pay service tax prior to 01.07.2010 and as per the Finance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... used the records. 6. The learned counsel drew our attention to the Final Order of this Tribunal in the case of Commissioner of C.EX. & S.T., Bangalore-I Vs. Keerthi Estates Pvt. Ltd. reported in 2019 (26) G.S.T.L. 227 (Tri.-Bang.). Relevant paras of the judgment are reproduced below:- "5. After considering the submissions of both the parties and perusal of the material on record, we find that the appellant is engaged in the Construction of Residential Complex in terms of the Development Agreements entered with land owners and prospective buyers. The period of dispute is from 16.06.2005 to 31.01.2007. Further we find that an explanation was added to the Finance Act 2010, in Section 65(105) (zzzh) of the Finance Act, 1994 whereby it was clarified that levy of service tax on construction of complex by builder will be taxable only from 01.07.2010 and further the Board vide its Circular No. 151/2/2012-ST dated 10.02.2012 clarified that prior to 01.07.2010 service tax is not chargeable from builders/developer. Further we find that this issue has been considered by the Division Bench of this Tribunal in the case of CCE Vs. U.B. Construction (P) Ltd. cited supra, wherein the Tribunal in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng transfer of immovable property were brought within the purview of taxable service by adding explanation to Section 65(105)(zzzh) w.e.f. 01.07.2010, and therefore, it has to be held that such contracts were not covered by Section 65(105)(zzzh) during the period prior to 01.07.2010." 6. Similarly, the Chennai Bench of the Tribunal in the case of Vijay Shanthi Builders Ltd. has followed the decision of Krishna Homes and has held that the service tax is not chargeable on construction of residential complex during the period prior to 01.07.2010. In view of the various decisions cited supra, we are of the considered view that prior to 01.07.2010 builders/developers are not liable to pay service tax for the Construction of Residential Complex Service and in the present case, the period involved is from 16.06.2005 to 31.01.2007. Consequently, we hold that the impugned order is not sustainable in law and we set aside the same by allowing the appeal of the appellant with consequential relief, if any. Since we have allowed the appeal of the appellant, the two appeals filed by the Revenue seeking imposition of penalty under Section 78 is not maintainable and are hereby dismissed." 7. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Finance Act, 2005, Clause (zzzh) was introduced into Section 65(105) of Finance Act, 1994, so as to bring within the purview of the term 'taxable service', a service provided or to be provided to any person by any other person "in relation to construction of complex". The expression "construction of complex" was defined in sub-section (30a) of Section 65 and accordingly this expression covered - "(a) construction of a new residential complex or a part thereof or (b) completion of 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". The expression residential complex was defined in Section 65(91a) of the Finance Act, 1994 as any complex comprising of - "(i) a building or buildings, having more than twelve residential units; (ii) a common area; and (iii) any one or more of facilities or services such as park, lift, parking spa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or the person authorized by the builder before 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." Thus, in terms of this explanation, when a builder/promoter/developer got a residential complex constructed for his customers with whom he had individually entered into agreements, in terms of which the prospective customers were required to make payments for the residential units to be constructed in instalments and the possession of the residential units was to be given to the customers on completion of the complex and full payment having been made, the builder/promoter/developer was to be treated as a deemed provider of construction of residential complex service to his customers. Thus, by this explanation, the scope of the Clause (zzzh) of Section 65(105) has been expanded and this amendment by adding an explanation has been held by this Tribunal in the case of CCE, Chandigarh v. U.B. Construction (P) Ltd. (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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