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TMI Blog2024 (7) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... consider the very same and after following the decision in M/s. Krishna Homes set aside the demand interest and penalties for the period prior to 01.07.2010. Thus, the demand interest and penalties for the period up to 01.07.2010 cannot sustain and require to be set aside. Demand Post 01.07.2010 up to September 2011 - HELD THAT:- This issue requires to be remanded to the adjudicating authority who is directed to re-quantify the service tax demand for the period 01.07.2010 to September 2011 after perusing the evidence furnished by appellant. Needless to say, that the appellant is liable to pay the redetermined service tax demand along with interest. Penalties - HELD THAT:- The appellant has discharged the service tax on their share of consideration for the disputed period. However, they failed to discharge the service tax on the land owner s share. There was much confusion as to the liability of a promoter/ developer/ builder to pay service tax. Being a transitional period (with regard to 01.07.2010) and also taking note of the fact that the appellant has discharged service tax on their share, it is found that it is a fit case to invoke Section 80 of the Finance Act 1994 as it stood ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Counsel submitted that the above Circular has been referred to by the Tribunal in the case of M/s. Krishna Homes vs. CCE, (2014) 34 STR - 881 to observe that the appellant who is a promoter/ builder/ developer is not liable to pay service tax prior to 01.07.2010. The said decision has been followed in the case of Pragati Edifice Pvt. Ltd. vs. Commissioner of CCE ST by Final Order No. 31010- 31011/2019 dated 18.09.2019. The Tribunal in the case of M/s. Helios Estates Pvt. Ltd., vs. CCE, Chennai in ST 40925/2013 by Final Order No.40577/2024 dated 30.05.2024 had occasion to consider the very same issue and held that the promoter/ builder/ developer is not liable to pay service for construction of residential complexes prior to 01.07.2010. 5. For the period post 01.07.2010 the Ld. Counsel conceded that the appellant is liable to pay Service tax. The Ld. Counsel of the appellant submitted that the liability to pay service tax on land owner share is accepted by the appellant. However, the appellant is contesting the quantification of demand of service tax. 6. It is submitted that the quantification of service tax is not correct for the reason that the department has taken the value of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the period up to 01.07.2010. The relevant para of Krishna Homes reads as under: 8. Coming first to the question as to whether the activity of M/s. Krishna Homes and M/s. Raj Homes was taxable during the period of dispute or not, by Finance Act, 2005, Clause (zzzh) was introduced into Section 65(105) of Finance Act, 1994, so as to bring within the purview of the term taxable service , a service provided or to be provided to any person by any other person in relation to construction of complex . The expression construction of complex was defined in sub-section (30a) of Section 65 and accordingly this expression covered - (a) construction of a new residential complex or a part thereof or (b) completion of finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic applications or fittings and other similar services; or (c) repair, alteration, renovation or restoration of, or similar services in relation to, residential complex . The expression residential complex was defined in Section 65(91a) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under :- Explanation. - For the purposes of this sub-clause, the construction of a new building 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 the person authorized by the builder before 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. Thus, in terms of this explanation, when a builder/promoter/developer got a residential complex constructed for his customers with whom he had individually entered into agreements, in terms of which the prospective customers were required to make payments for the residential units to be constructed in instalments and the possession of the residential units was to be given to the customers on completion of the complex and full payment having been made, the builder/promoter/developer was to be treated as a deemed provider of construction of residential complex service to his customers. Thus, by this explanation, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of service tax is erroneous for the reason that the adjudicating authority has adopted the value mentioned in earlier agreement executed by the appellant and the landowner. In the supplement agreement executed between the parties for the disputed period the value is less with regard to the landowner share. On the basis of these submissions, we are of the view that this issue requires to be remanded to the adjudicating authority who is directed to re-quantify the service tax demand for the period 01.07.2010 to September 2011 after perusing the evidence furnished by appellant. Needless to say, that the appellant is liable to pay the redetermined service tax demand along with interest. 15. The Ld. Counsel has argued with regard to the penalties imposed. The appellant has discharged the service tax on their share of consideration for the disputed period. However, they failed to discharge the service tax on the land owner s share. There was much confusion as to the liability of a promoter/ developer/ builder to pay service tax. Being a transitional period (with regard to 01.07.2010) and also taking note of the fact that the appellant has discharged service tax on their share, we find ..... X X X X Extracts X X X X X X X X Extracts X X X X
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