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TMI Blog2025 (1) TMI 1207X X X X Extracts X X X X X X X X Extracts X X X X ..... l No. 111/2015(STA-II) dated 06.02.2015 partially upholding the Order-in-Original No. 33/2011 dated 21.02.2011 which had confirmed demand of Service Tax of Rs.2,47,585/- under Section 73(1) of the Finance Act, 1994 (ACT), along with applicable interest and imposing penalty equal to the demand confirmed, under Section 78 of the Act ibid. 2. Facts briefly stated are that, the Appellant, a partnership firm was engaged in rendering Construction of Residential Complex Service. The department alleged that the Appellant is liable to pay service tax on the amounts received as consideration from Customers towards rendering the said service. Therefore, a show Cause Notice (SCN) dated 18.08.2010 was issued to the Appellant proposing to demand duty of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Order-in-Appeal No. 2/2009 only showed the judicial indiscipline as the same authority could not view the same issue by taking two different views in two orders. Reliance was placed in this regard on the decisions in the case of CIT, Bhopal Vs. Ralson Industries Ltd. [2007 (7) STR 497 (SC)], Bhopal Sugar Industries Vs. ITO, Bhopal [AIR 1961 SC 182], Morgan Security and Credit (P) Ltd. Vs. Modi Rubber Ltd. [2006 (14) Scale 267] and Union of India Vs. Kamalakshi Finance Corporation Limited [1991 ELT 433 SC]. ii. It was contended that the Appellant as a developer of property on the land purchased by them by engaging a contactor to render construction service could not be held liable for payment of service tax as they had sold only completed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns in the grounds of appeal and further submitted that on the same issue involving the Appellant the Tribunal had earlier decided the matter in favour of the Appellant vide Final Order No. 40112/2019 dated 17.01.2019 and hence the demand is not sustainable. Further reliance was placed by the Ld. Counsel on the decision in the case of M/s. Krishna Homes Vs. CCE, Madurai [2014 (34) STR 881 (Tri.-Del.)]. 5. The Ld. Authorised Representative Smt. O.M. Reena for the Revenue affirmed the findings of the Lower Appellate Authority and submitted that the Appellant was liable to pay service tax under the category of Construction of residential Complex Service. It was pointed out that the Appellant had contravened the provisions of ACT and Rules with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier period from 16.06.2005 to 31.03.2009 had vide Final Order No. 40112/2009 dated 17.01.2009 set aside the demand of service tax on construction of residential complex service. The relevant portion of the said order is reproduced herewith for the sake of convenience: - "5. The foremost issue is with regard to the demand raised under construction of residential complex service. It is not disputed that such construction activities involve both supply of labour as well as element of service and contracts are composite in nature. The demand prior to 1.6.2007 cannot sustain as per the decision of Apex Court in Larsen & Toubro Ltd. (supra). The Tribunal in the case of Real Value Promoters (supra) had analyzed the very same issue and had held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mposition of Service tax on Builders - Regarding. Construction of residential complex was brought under service tax w.e.f. 1-6-2005. Doubts have arisen regarding the applicability of service tax in a case where developer/builder/promoter enters into an agreement, with the ultimate owner for selling a dwelling unit in a residential complex at any stage of construction (or even prior to that) and who makes construction linked payment. The 'Construction of Complex' service has been defined under Section 65 (105)(zzzh) of the Finance Act as "any service provided or to be provided to any person, by any other person, in relation to construction of a complex". The 'Construction of Complex' includes construction of a 'new residential complex'. Fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ential complex' as defined for the purposes of levy of service tax and hence construction of it would not attract service tax. 3. The matter has been examined by the Board. Generally, the initial agreement between the promoters/builders/developers and the ultimate owner is in the nature of 'agreement to sell'. Such a case, as per the provisions of the Transfer of Property Act, does not by itself create any interest in or charge on such property. The property remains under the ownership of the seller (in the instant case, the promoters/builders/developers). It is only after the completion of the construction and full payment of the agreed sum that a sale deed is executed and only then the ownership of the property gets transferred to the u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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