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TMI Blog2025 (1) TMI 842X X X X Extracts X X X X X X X X Extracts X X X X ..... in construction of residential complex known as 'Global City' consisting of 132 buildings at Virar (West), Distt. Palghar, Maharashtra. During the course of EA 2000 audit conducted on the records of the respondent for the period April, 2010 to March, 2014 it was found that though they have paid service tax on the advance/payments received in respect of residential premises booked by the buyer prior to the issuance of 'Occupancy Certificate' as well as the subsequent payments received from those buyers against such earlier bookings, however for the complete payment paid by the buyers who have booked the flats with the respondent after the receipt of 'Occupancy Certificate,' no service tax had been paid by the respondent. It has also been found that they have not received 'Completion Certificate' from the competent authority in respect of the said residential complex till 31.3.2014 i.e. last day of the period covered under audit. For these alleged irregularities the department issued a show cause notice dated 19.10.2015 to the respondent as to why:- i) Service Tax totally amounting to Rs. 1,15,37,316/- (Rupees one crore, fifteen lakh, thirty seven thousand, three hundred and sixtee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... availing the exemption. Learned Authorised Representative further submits that when there is a requirement of completion certificate it must be adhered to. According to learned Authorised Representative, the construction activities were undertaken by the respondent in Vasai-Virar Municipal Corporation area and Service tax is exempted only when the entire consideration is received by them from a buyer after the issuance of completion certificate by the competent authority. Learned Authorised Representative also argued that completion certificate used to be issued by the competent authority only after the completion of the approved construction activity whereas occupancy certificate is merely a certificate issued by the competent authority allowing the premises/building to be occupied. He accordingly prayed for setting aside the impugned order. 5. Per contra learned Chartered Accountant appearing for the respondent-assessee prayed for dismissal of the appeal filed by revenue. According to learned Chartered Accountant, in the Mumbai Metropolitan Region, which includes Municipal Corporation of Greater Mumbai, Thane, Kalyan, Navi Mumbai, Ulhasnagar and other areas, the process for buil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceived after issue of occupancy certificate by BMC, leading to a mere transfer of title in immovable property, falls outside the definition of "Service" provided in Section 65B (44) of the Finance Act, 1994, and is therefore, not taxable." The aforesaid press release is merely a clarification about the existing exception provided in the Finance Act, 1994 therefore it can safely be said that the same is applicable retrospectively from the date the provision mentioned therein made part of the statute. The necessity for issuing such a clarification arose in order to give effect to the intention behind the said exemption and not in a manner which would defeat the very purpose of the same. The main reason for issuance of clarification by the Ministry of Finance dated 26.10.2015 is that after the issuance of occupancy certificate by the Brihanmumbai Municipal Corporation (BMC) the sale of flats/dwelling etc. is mere transfer of title in immovable property and does not amount to any service and hence falls outside the purview of Section 65B (44) of the Finance Act, 1994. The press release is confined to the cases pertaining to BMC as it has been issued in response to a representation m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is considerable force in the submission of the noticee that the clarifications issued by the Finance Ministry relating to BMC area is also equally applicable to their projects located at Virar.' 8. In the case in hand the Occupancy Certificate is not disputed and its issuance by Vasai-Virar Municipal Corporation is also an admitted fact. The Revenue i.e. the appellant herein is not casting any doubt on the said certificate and their only concern is that the said Occupancy certificate has not been issued by BMC but by a different Municipal Corporation, therefore the clarification issued by Ministry of Finance will not be applicable which, in our view, is totally unfounded. We have noticed that the expression used in Section 66E(b) ibid is 'after issuance of completion certificate' which, in our view, can't be limited to only the completion certificate. It is the prevailing practice that when a building is constructed as per the building approved plans and meets other building standards like distance from the road, the height of the building, etc., the local authorities issued a Completion Certificate and after getting the completion certificate, the builder can obtain the Occupanc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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