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TMI Blog2014 (10) TMI 63X X X X Extracts X X X X X X X X Extracts X X X X ..... ripartite agreement dated 17.01.2001 between Sports Authority of Andhra Pradesh (SAAP), Andhra Pradesh Industrial Infrastructure Corporation (APIIC) and M/s IVRCL. According to the agreement, SPV was to execute the project and hand it over to the Organizing Committee. After conclusion of the games, the property was handed over to the appellants and according to the learned counsel, they were allowed to sell the same to buyers. He submitted that for the purpose of organizing games, flats constructed were actually semi- finished and appellants finished the same and sold them. It was submitted that the appellants had entered into two agreements. In the first agreement, the semi-built flats were sold to the buyers for a specific price and land cost was shown and thereafter another contract was entered into for finishing the work. Service tax has been demanded on the entire amount recovered from the buyers by the appellant and the amount demanded is more than Rs. 6.67 crores. 3. The second demand has arisen as a result of the stand taken by the Revenue that the work undertaken by the appellants for a sewerage project in Allahabad amounts to site formation service. On this the entire am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... below:- 2. There were two agreements with each customer first agreement was between the appellant as the seller and the prospective buyer/customer as a purchaser for sale of flat, which was to be constructed up to column, beams, roof along with brick work. The second agreement was between the appellant and the prospective buyer/customer for the purpose of carrying on the finishing work on the flat - plastering, water supply, sanitary and electric fittings, flooring etc. The appellant engaged contractors for construction and finishing and after completion of the construction and finishing, handed over the flats to the customers. 8. In that case also, according to two agreements, only columns, beams and roof along with brick work were completed and the second agreement was for the purpose of finishing work. The learned counsel submitted that in this case also, the flats constructed were not complete and were in semi-finished condition. Therefore the first agreement was for sale of such semi- finished flats and undivided share of the land. The second agreement was for finishing the apartment and construction w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally and receives a consideration for parting with such rights. The consideration is the form of constructed flats to be received later. Of course the constructed flat has got both value of material used and the value of service provided by the service provider. Obviously service tax can be levied only on the value of service and cannot be equal to the full value of the land parted with by the land owner. This principle gets complied with when abatement from value of the constructed flat is given to the extent of 67% by Notification No. 1/2006-S.T. and earlier Notifications. However, we find that the decision in the case of Krishna Homes (supra) is the latest in the line of decisions and has taken into account, the circular and other issues in detail and is a final order, whereas other decisions are not final orders. As regards LCS City Makers Pvt. Ltd., even though it is a final order yet, the facts of that case are different, compared to the present case. 10. Coming to the facts of this case, what we find in this case the learned Commissioner has recorded a finding that service has been provided to the individuals. If services are provided to the individuals, it may not amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stainable. 11. We also find the observations of Commissioner in paragraph 17.3 also reflect the fact that the circular has not been understood correctly and contrary to the decision in the case of Krishna Homes. Paragraph 17.3 is relevant for our observations above and therefore is reproduced. 17.3 It is also contended by the noticee that the construction is for owner for his personal use and the same is excluded from the definition of Construction of Residential Service and relied upon the Boards Circular No. 108/2/2009, dated 29.01.2009 and Master Circular dated 23.08.2007. On a careful reading of the provisions, it is amply clear that the said exclusion applicable only when a complex is constructed by a person directly engaging any other person for designing or planning the layout, and such complex is intended for personal use. Thus, the exclusion is applicable for a complex intended for residential use and the same is not applicable to individual flats/villas in the complex. Further, para 3 of the said Board's Circular only clarifies that any service provided by builder/developer in connection with the constr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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