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TMI Blog2019 (11) TMI 679X X X X Extracts X X X X X X X X Extracts X X X X ..... f works contract under Section 65(105)(zzzza). The Hon ble Supreme Court in the case of COMMISSIONER, CENTRAL EXCISE CUSTOMS VERSUS M/S LARSEN TOUBRO LTD. AND OTHERS [ 2015 (8) TMI 749 - SUPREME COURT] had held that prior to 1.6.2007, there was no charging section to specifically levy service tax on works contract on service and in the present case, the entire period is prior to 1.6.2007 - therefore, the appellants are not liable to pay service tax on the entire activity of raising the construction and providing the various category of services viz., Health and Fitness Centre Service, Maintenance or Repair Service or Real Estate Agent Service. CENVAT Credit - demand of excess 20% as per rule 6 - Applicability of Rule 6 of CCR - contention of the Department in demanding excess of 20% is that the appellants are providing both taxable as well as exempted service and therefore, hit by Rule 6(3)(c) of CENVAT Credit Rules, 2004 - HELD THAT:- In the present case, the appellant give full constructed apartment to the owner of the land and this by no stretch of imagination can be seen as a service provided by the appellant to the land owners. Co-developers do not provide any ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gether amount to sale of residential apartment including the common facility/area as mentioned in the agreement which also describe the appellant s name, floor, door number, etc. Further, as per the agreement, the customers / clients are required to make an initial lump sum payment at the time of entering into an agreement and thereafter, periodical payments as set out in the agreement. The amount so paid is treated as an amount paid towards the works contract and the appellant bifurcated the value into services and goods and paid service tax on the value of services under Construction of Complex Service and VAT at appropriate rate; whereas in the case of Joint Development where percentage share of constructed property is handed back to the co-developer, there will be no sale deed as the co-developer is already the owner. 2.1 In March 2006, DGCEI started investigations and recorded the statements of certain persons working with the appellant. During investigation, the appellant had a strong belief that they are not liable to pay service tax but still they calculated the service tax liability and interest for the period from 16.6.2005 to 31.3.2006 after applying the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ract involving transfer of property in goods along with the transfer of service. He further submitted that the appellant has obtained VAT Registration in the State of Karnataka and discharged applicable tax by treating the transaction as works contract. It is his further submission that it is now well settled law that service tax liability on indivisible works contract arises only with effect from 1.6.2007 with the introduction of taxable service of works contract under Section 65(105)(zzzza) in terms of the ratio laid down by the Hon ble Supreme Court in the case of Commissioner of Central Excise and Cus. Kerala vs. Larsen Toubro Ltd.: 2015 (39) STR 913 (SC) wherein it has been categorically held that prior to 1.6.2007, there was no charging section to specifically levy service tax on works contract service or any mechanism to tax service element derived from gross amount charged for works contract less value of property in goods transferred in execution of works contract. Further, the Supreme Court in the case of Commissioner of Central Excise and Service Tax, Karnataka vs. M/s. Shoba Developers Ltd.: 2017-TIOL-29-SC-ST held that the decision in the case of Larsen and Toubro do ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on agreement, the appellants have specified a separate consideration for the club house facility and in the club house, the appellant has also constructed the health and fitness facility. Learned counsel read out the definition of Health and Fitness Centre Service as provided in the Finance Act and also the taxable service as provided under Section 65(105)(zw) and submits that it is not even the case of the Department that the appellants are providing any service for physical wellbeing. The only activity undertaken by the appellant is construction of club house for which the appellants have charged some amount from the prospective owners. Once the club is constructed the same is handed over to the owners association who will manage and operate the said Club. The appellants do not operate the club or provide any service in relation to club at all. In this regard, they relied upon the decision rendered in the case of Raheja Universal Pvt. Ltd. vs. Commissioner of Service Tax, Mumbai-I: 2017 (5) GSTL 289 (Tri.-Mum.). Further, the learned counsel submitted that the appellants are also not providing any Real Estate Agent service. He further submitted that at times the buyer during the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SLP of the Department dismissed in Commissioner vs. S.K. Enterprises: 2009 (14) STR J20 (SC) 4.4 He further submitted that Rule 6 of the CENVAT Credit Rules, 2004 is not attracted in the present case because as per the agreement the appellant would construct the apartment on such land and after the construction is over, the land owner will be given fixed number of apartment as his share as a co-developer. 5. On the other hand, the learned AR defended the impugned order and submitted that the appellants have charged from the ultimate customers for these services and therefore, they are liable to pay the service tax on the said services. In support of his submission, Revenue relied upon the decision in the case of Satya Prakash Builders Pvt. Ltd. vs. Commissioner of Central Excise, Jaipur-I: 2017 (4) GSTL 393 (Tri.-Del.). 6. After considering the submission of both the parties and perusal of the material on record, we find that it is not in dispute that the entire activity of the appellant is construction of residential apartments and such activity is in the nature of indivisible works contract involving transfer of property in goods along ..... X X X X Extracts X X X X X X X X Extracts X X X X
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