2019 (3) TMI 1280 - AT - Service Tax

Nature of activity - Sale of flat or construction service - Inasmuch as the completion certificate was not available with the appellant, Revenue entertained a view that the said activity of sale cannot be considered to be a sale of flat and the same is covered under the services which were taxable - Held that - We really fail to understand that when the appellant himself is approaching the Authorities for issuance of the completion certificate after almost more than a year of sale of the flat, how can they adopt the plea that the flats were completed at the time of sale and in terms of the provisions of the Finance Act, the certificate issued by the architect should be taken as an evidence of completion - appeal dismissed - decided against appellant.

Summary

Issues:
1. Whether the sale of a flat without a completion certificate constitutes a taxable service under 'Construction of Residential Complex Services'?
2. Whether a completion certificate issued by an architect without proper authorization from the Competent Authority is valid for exemption from service tax?
3. Can an architect's certificate be considered as evidence of completion for the purpose of service tax exemption when the building was not completed at the time of sale?

Analysis:
1. The appellant sold a flat without a completion certificate, leading to a demand for service tax. The Revenue argued that without the completion certificate, the sale cannot be considered a sale of a flat but a taxable service. The Mathura Vrindavan Development Authority confirmed that the completion certificate was pending, reinforcing the Revenue's stance.

2. The appellant presented a completion certificate from an architect to seek exemption from service tax. However, the Lower Authorities ruled that the certificate lacked validity as it was not issued by the Competent Authority as required by Section 66E of the Finance Act. The advocate cited a Service Tax Order but failed to prove the architect's authorization to issue such certificates.

3. The Tribunal examined the architect's certificate and found it lacking proper authorization from the Competent Authority. The appellant's delayed application for a completion certificate after the sale raised doubts about the completion status at the time of sale. The Tribunal emphasized that the architect must be authorized to issue completion certificates, and in this case, the certificate was rightly rejected.

In conclusion, the Tribunal dismissed the appeal, upholding the demand for service tax due to the absence of a valid completion certificate at the time of the flat sale. The Tribunal highlighted the importance of proper authorization for architects issuing completion certificates and rejected the appellant's claim based on an unauthorized certificate.