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TMI Blog2018 (6) TMI 800X X X X Extracts X X X X X X X X Extracts X X X X ..... JECTS VERSUS CCT, RANGAREDDY GST [2018 (5) TMI 889 - CESTAT HYDERABAD], where it was held that the amount attributable to the consideration received by appellant in the form of land rights from the land owner stands included in the value of villas sold to prospective customer which would mean that whatever consideration was received by the appellant in form of developmental right was considered in assessable value. Appeal allowed - decided in favor of appellant. - Application No.ST/Misc/41094/2017 Appeal No.ST/214/2010 - FINAL ORDER No. 41465/2018 - Dated:- 9-5-2018 - Ms. Sulekha Beevi C.S. Member (Judicial) and Shri Madhu Mohan Damodhar, Member (Technical) Shri M.N. Bharathi, Advocate For the Appellant Shri K.P. Muralidharan, AC (AR) For the Respondent ORDER Per Bench MA filed by Revenue for change of cause title is allowed. 2. M/s.Ramaniyam Real Estates Private Ltd., the appellants herein, are engaged in construction of residential and commercial complex During the course of audit, it emerged that appellants had entered into agreement for construction of residential complex as a joint venture project with Dwaraka Colony Welfare Association. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the definition of Residential Complex Service refers to construction of complex by a person for his own residential purpose by engaging a contractor . Hence the word person includes persons also. Hence the construction done by the members of Dwaraka Colony Association for their own residential purpose is totally out of service tax levy by virtue of the Exclusion Clause. iv) The members of Dwaraka Colony executed a legal power of attorney and authorized the power agent to sell their part of land relinquished by them to any prospective buyers. As such, the relinquished land was sold to 30 buyers by executing the sale deed by the power agent and the deed executed by the power agent is considered a s executed by the members . Legally, the sale consideration belong to the members of the Dwaraka Colony and the same has been adjusted against consideration for construction by the appellants. 3. On the other hand, Ld. A.R ShriK.P.Muralidharan supports the impugned order. He draws our attention to para 2.3 of the SCN to point out that where the consideration is not wholly or partly consisting of money, the taxable value is to be calculated on the basis of comparable service or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uilder or developer; and (iii) contractor who undertakes construction) : Issue involved is regarding the liability to pay service tax on flats/houses agreed to be given by builder/developer to the land owner towards the land /development rights and to other buyers. Clarification : Here two important transactions are identifiable : (a) sale of land by the landowner which is not a taxable service; and (b) construction service provided by the builder/developer. The builder/developer receives consideration for the construction service provided by him, from two categories of service receivers: (a) from landowner: in the form of land/development rights; and (b) from other buyers: normally in cash. (A) Taxability of the construction service : (i) For the period prior to 1-7-2010 : construction service provided by the builder/developer will not be taxable, in terms of Board s Circular No. 108/2/2009-S.T., dated 29-1-2009 [2009 (13) S.T.R. C33]. (Emphasis added) The Circular No.108/2/2009-ST dt. 29.01.2009 which has been reiterated in the aforesaid circular dated 10.02.2012, reads as under : Circular No. 108/2/2009-S.T., dated 29-1-2009 F.No. 137/12/2006-CX.4 G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x as defined for the purposes of levy of service tax and hence construction of it would not attract service tax. 3. The matter has been examined by the Board. Generally, the initial agreement between the promoters/builders/developers and the ultimate owner is in the nature of agreement to sell . Such a case, as per the provisions of the Transfer of Property Act, does not by itself create any interest in or charge on such property. The property remains under the ownership of the seller (in the instant case, the promoters/builders/developers). It is only after the completion of the construction and full payment of the agreed sum that a sale deed is executed and only then the ownership of the property gets transferred to the ultimate owner. Therefore, any service provided by such seller in connection with the construction of residential complex till the execution of such sale deed would be in the nature of self-service and consequently would not attract service tax. Further, if the ultimate owner enters into a contract for construction of a residential complex with a promoter/builder/developer, who himself provides service of design, planning and construction; and after such co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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