2023 (4) TMI 548 - AT - Service Tax

Levy of Service Tax - Architect services - completion certificate for the Mall had been issued before July 01, 2010, or not (because in that case no service tax would be leviable) - HELD THAT - Government had issued the Service Tax (Removal of Difficulty) Order 2010. It may have come into force with effect from July 01, 2010 but it states that for the purpose of section 65(105)(zzq), the expression authority competent would include an Architect registered that the Council of Architecture constituted under the Architect Act, 1972. Since it is a Removal of Difficulty Order, the Commissioner (Appeals) was not justified in holding that it would be prospective in nature. The benefit of the certificate date August 19, 2009 issued by the Architect would come to the aid of the appellant. Regarding the certificate dated March 31, 2010 issued by the Regional Manager, RIICO, a perusal of the said certificate would show that it was issued by the Regional Manager RIICO in connection with the commercial plot allotted to the appellant. It states that the construction was done by the appellant as per the sanctioned plan and RIICO norms and the property may be used for commercial activities as per the terms and conditions of the allotment. This communication was sent by the Regional Manager pursuant to the communication dated August 19, 2009 sent by the appellant to RIICO seeking approval for use of the building Capital Mall for commercial/business purpose. The appellant had stated that the construction of the shopping mall named Capital Mall was completed on the allotted premises ad measuring 9996 sq. mtrs. and therefore, RIICO should issue the letter of approval for using the Capital Mall for business activities. Thus, the completion certificate has been issued to the appellant before July 01, 2010. The payments were received by the appellant after the completion certificate was issued to the appellant. They could, therefore, not be subjected to levy of service tax. The impugned order dated March 27, 2013 passed by the Commissioner (Appeals), therefore, cannot be sustained - appeal allowed.

Summary

Issues involved:
The issue involves challenging an order regarding service tax on commercial construction activities.

Details of the judgment:
The appellant, engaged in developing shopping malls, acquired land from RIICO and constructed a mall named "The Capital Mall." The completion of the mall was certified by an architect in August 2009. RIICO approved the construction for commercial activities in March 2010. The dispute revolved around the applicability of service tax on the construction activities.

Certificate by Architect:
The appellant relied on the architect's certificate dated August 12, 2009, and the Service Tax (Removal of Difficulty) Order 2010 to argue that no service tax should be levied post-completion certificate issuance.

Certificate by RIICO:
RIICO's letter dated March 31, 2010, confirmed the completion of construction as per sanctioned plans and allowed commercial use. The Commissioner (Appeals) initially rejected this as a completion certificate but was later found unjustified.

Judgment and Conclusion:
The Tribunal held that the completion certificate was issued before July 01, 2010, and payments received post-completion could not be taxed. The impugned order was set aside, and the appeal was allowed.