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2013 (6) TMI 315 - AT - Service TaxConstruction of residential complexes - Levy of ST on Advance received - Section 65(105)(zzzh) of Finance Act, 1994 read with Section 65(30a) - held that - the decision of Punjab & Haryana High Court in the case of G.S. Promoters 2010 (12) TMI 34 - PUNJAB AND HARYANA HIGH COURT was about constitutional validity of the explanation added by Finance Act, 2010. That decision did not examine Service Tax liability for the period prior to the date on which the explanation was added. The Tribunal has taken a view in CCE, Chandigarh v. M/s Skynet Builders, Developers, Colonizer and Others 2012 (4) TMI 427 - CESTAT, NEW DELHI . and other appeals that the explanation cannot be have retrospective effect and that in view of the various clarifications issued by C.B.E. & C. during the relevant time no Service Tax liability can be imposed on the respondent for this type of activity. - Decided in favor of assessee.
Issues:
Service Tax liability for construction of residential complexes without payment during a specific period. Analysis: The case involved the question of whether Service Tax was payable by the respondents for constructing residential complexes and selling them without paying any tax during a certain period. The Revenue contended that the respondents were providing a service to prospective buyers by taking advances for construction, relying on the explanation added under Section 65(105)(zzzh) by the Finance Act, 2010. The Commissioner (Appeals) had set aside the demand for tax, citing that no service was provided as the respondents were using their labor and constructing on their land. The respondent's counsel argued that the explanation could not have a retrospective effect, referencing a Tribunal's decision in a similar case. The Tribunal analyzed the arguments and previous judgments. It noted that the decision of the Punjab & Haryana High Court did not address the Service Tax liability for the period before the explanation was added. The Tribunal referred to its earlier decision in a different case, where it held that the explanation could not have a retrospective effect. Additionally, it considered the clarifications issued by the Central Board of Excise and Customs (C.B.E. & C.) during the relevant time, which supported the view that no Service Tax liability could be imposed on the respondents for such activities. In conclusion, the Tribunal rejected the appeal filed by the Revenue, affirming that the respondents were not liable to pay Service Tax for the construction of residential complexes during the specified period. The decision was based on the interpretation of relevant legal provisions, previous judgments, and clarifications issued by the tax authorities, emphasizing that the explanation added by the Finance Act, 2010 did not have retrospective effect in this case.
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