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TMI Blog2022 (4) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... [ 2004 (1) TMI 328 - SUPREME COURT ], the Apex Court held that the construction of statutory phrase, placed by a circular issued by the Central Board of Excise and Customs, although different from the one placed by the Supreme Court, was binding on the Revenue till the same was withdrawn. It becomes clear that the circular, is binding on the department and this circular makes it more than abundantly clear that construction service provided by the builder/developer will not be taxable for the period prior to 01.07.2010 - Appeal allowed - decided in favor of appellant. - SERVICE TAX Appeal No. 12268 OF 2019-DB - FINAL ORDER NO. A/10337 / 2022 - Dated:- 12-4-2022 - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri Pankaj Rachchh, Advocate for the Appellant Shri Vinod Lukose, Superintendent (AR) for the Respondent ORDER Appellant has filed this present appeal being aggrieved by Order-in-Appeal No. RAJ-EXCUS-000-APP-139-2019 dated 09.07.2019 passed by the Commissioner (Appeals), Rajkot. 2. The brief fact of the case is that based on intelligence that Appellant was not paying Service tax on the Construction activities carried out by him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction (i.e. after the issue of completion certificate). The Ld. Commissioner (Appeals) has not given a single finding on the grounds of appeals. 4. He submits that it is admitted facts in the show cause notice that the appellant had entered into agreement with his buyers for sale of shops during the construction of commercial complexes and residential cum commercial complexes and Service tax was demanded classifying the service as Commercial or Industrial Construction under Section 65(105)(zzq) of the Finance Act, 1994. As per clarification issued by CBEC vide Circular No. B1/6/2005-TRU dated 27.07.2005 at Para 13.3 that residential complex may also contain other facilities such as market or shopping complex etc. Therefore, reliance placed on Circular No. 108/02/2009-ST dated 29.01.2009 by the Assistant Commissioner was very much correct. 5. He also argued that the Ld. Commissioner (Appeals) has failed to appreciate that the Assistant Commissioner had correctly and judiciously dropped the proceedings only after understanding the entire facts and clarification on the subject matter as is evident from findings discussed in his order. Therefore, order passed by the Ld. Assista ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the time of introduction of the Finance Bill, 2010 vide D.O.F. No. 334/1/2010-TRU dated 26.02.2010 had inter alia clarified that at paragraphs 3.1. as under : In the definition of the taxable services Construction of Complex service *section 65 (105) (zzzh)+, and Commercial or industrial construction service *section 65 (105) (zzq)+, it is being provided that unless the entire consideration for the property is paid after the completion of construction (i.e. after issuance of completion certificate by the competent authority), the activity of construction would be deemed to be a taxable service provided by the builder/promoter/developer to the prospective buyer and the service tax would be charged accordingly The said Circular in Annexure -B at paragraph 8.1, 8.2 and 8.6 further clarified as under: 8.1 The service tax on construction of commercial or industrial construction services was introduced in 2004 and that on construction of complex was introduced in 2005. 8.2 As regards payment made by the prospective buyers/flat owners, in few cases the entire consideration is paid after the residential complex has been fully developed. This is in the nature of ou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e clear position of law, on reference being made from the field formation seeking clarification, the CBEC vide circular No. 151/2/2012-ST dated 10.02.2021 had issued clarification regarding the levy and collection of Service tax on Construction Service [clauses (zzq), (zzzh) of Section 65(105) of the Finance Act, 1994 ] as under : (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]. (ii) For the period after 1-7-2010, construction service provided by the builder/developer is taxable in case any part of the payment/development rights of the land was received by the builder/ developer before the issuance of completion certificate and the service tax would be required to be paid by builder/developers even for the flats given to the land owner. This circular in unequivocal terms clarify for both the construction services [Clauses (zzq) and (zzzh) of Section 65(105) of the Finance Act, 1994] as it uses the words Construction Services provided by the builder /developer will n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gainst them on the ground that they have evaded payment of Service Tax on the services rendered by them to their customers in the category of Commercial or industrial Construction Services during the period 2004-2005 to 2008-09. Whereas, we find that an explanation was added by the Finance Act, 2010 in Section 65(105)(zzzh) of the Finance Act, 1994 which reads as under : Construction of a Complex which is intended for sale, wholly or partly, by a builder or any person authorized by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorized by the builder before the grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provided by the builder to the buyer. Further, the Board issued clarification on the construction service vide Circular No. 151/2/2012-S.T., dated 10-2-2012 as under: 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 t ..... 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