2010 (5) TMI 136 - AT - Service Tax

Circular No.108/2/2009-ST dated 29.1.2009- the appellants had acquired the land and subsequently built the houses / flats thereupon which were transferred to the customers after the construction was completed. As such, the ownership of the property remain with the appellants till the construction was over and the residential units were handed over to the ultimate buyers. Hence, the case squarely falls under paragraph 3 of the Circular No.108/2/2009-ST dated 29.1.2009 which was not available at the material time when the original order was passed. Held that-in the light of the decision of Ardra Associates Vs. CCE, Calicut, set aside the impugned order and remand the matter to the original authority for fresh decision.

Summary

Issues:
1. Interpretation of Circular No.108/2/2009-ST regarding ownership of property during construction.
2. Application of the decision in the case of Ardra Associates Vs. CCE, Calicut, 2010 (17) STR 162.
3. Remand of the matter to the original authority for fresh decision.

Analysis:
1. The main issue in this case was the interpretation of Circular No.108/2/2009-ST regarding the ownership of property during construction. The appellants argued that they retained ownership of the property until construction was completed and units were handed over to buyers. They relied on the Circular to support their position, which was not available at the time of the original order. The Tribunal considered this argument and decided to set aside the impugned order, remanding the matter for a fresh decision by the original authority. This decision was based on the facts of the case and the cited Circular.

2. The appellants also cited the decision in the case of Ardra Associates Vs. CCE, Calicut, 2010 (17) STR 162 to support their argument. The Tribunal took this into account along with the Circular dated 29.1.2009 and decided to allow the appeal by way of remand. The Tribunal found it necessary to reconsider the matter in light of the cited decision and Circular, indicating the importance of legal precedents and circulars in tax matters.

3. Finally, the Tribunal, comprising Hon'ble Dr. Chittaranjan Satapathy and Hon'ble Ms. Jyoti Balasundaram, decided to remand the matter to the original authority for a fresh decision. The original authority was instructed to provide the appellants with a reasonable opportunity for a hearing before passing a new order. This approach ensured fairness and due process in the resolution of the case. The decision was dictated and pronounced in open court, indicating transparency and adherence to legal procedures.