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TMI Blog2024 (7) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... 06.2007. Following the decision of the Hon ble Apex Court in the case of Larsen Tourbo, it is held that the demand for the period up to 01.06.2007 cannot sustain and requires to be set aside. Demand for the period up to 01.07.2010 - HELD THAT:- In the present case, the demand is raised under commercial or Industrial Construction Services as well as Construction of Residential Services. In the case of REAL VALUE PROMOTERS PVT. LTD., CEEBROS PROPERTY DEVELOPMENT, PRIME DEVELOPERS VERSUS COMMISSIONER OF GST CENTRAL EXCISE, CHENNAI [ 2018 (9) TMI 1149 - CESTAT CHENNAI] , it was held that in respect of any contract which is composite in nature, the demand of service tax cannot be under CICS/CCS/ RCS for the period prior to 01.07.2012 and the demand would sustain only under WCS. The demand of service tax, interest and penalties cannot sustain. The impugned order is set aside. The appeal is allowed. - MS. SULEKHA BEEVI. C.S., MEMBER (JUDICIAL) AND MR. VASA SESHAGIRI RAO, MEMBER (TECHNICAL) Ms. Radhika Chandrasekar, Advocate, for the Appellant Shri Harendra Singh Pal, Authorised Representative for the Respondent ORDER Brief facts are that the appellant is engaged in the construction of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rior to 01.07.2010. The appellant was a promoter, developer, builder for construction of buildings/residential apartments. The Board s Circular No.108/02/2009 dated 29.01.2009 has clarified that a promoter/developer/ builder is not liable to pay service tax for construction of residential projects. The Finance Act 2010 has for the first time brought developers into the ambit of service tax with effect from 01.07.2010 by introduction of an explanation under Section 65 (105) (zzzzq). This itself would show that the developers are not liable to pay service tax for the construction services prior to 01.07.2010. 4. The Tribunal in the case of M/s. Krishna Homes versus CCE 2014 (34) STR 881 had considered the issue as to whether demand of service tax can be made against a promoter/builder developer prior to 01.07.2010. The issue was held in favour of the assessee. 5. The Ld. Counsel relied upon the decision of the Tribunal in the case of Real Value Promoters Pvt Limited vide Final Order No.42436-42438/2018 wherein it has been held that the demand of service tax on composite invisible contract can be made only under works contract services for the period prior to 01.07.2012. The said deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orks executed are not service simpliciter but construction services involving both materials as well as rendition of services. The definition of works contract services was introduced for the first time with effect from 01.06.2007. The Hon ble Apex Court in the case of Larsen Tourbo Ltd.(supra) had held that the demand of service tax in the case of composite contracts cannot sustain for the period prior to 01.06.2007. Following the decision of the Hon ble Apex Court in the case of Larsen Tourbo, we hold that the demand for the period up to 01.06.2007 cannot sustain and requires to be set aside. 11. The Ld. Counsel has argued that the demand for the period up to 01.07.2010 cannot sustain for the reason that the appellant was carrying out construction services as a builder/developer/promoter. The Board vide Circular No.108/02/2009 dated 29.01.2009 has clarified that the promoter / developer / builder is not liable to pay service tax for construction of residential projects for the period prior to 01.07.2010. The issue was considered by the Tribunal in the case of M/s. BBC City park (a sister concern of the appellant) vide the Final Order No. 40599/2024 dated 09.05.2024. The Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceeds for the same as their share from the project. 11. From the foregoing, it appears that the services rendered by the assesse regarding construction of 120 flats with common amenities like lift, club house, gymnasium, mini theatre, children s play area, etc, for the land owners M/s.City Lando Corpn and 7 others, as a builder and subsequently entering into construction agreements with various customers as a builder, is classifiable under Construction of Complex Service and are liable for payment of Service Tax. 18. For rendering construction of complex service, the assesse received service charges, costs of construction, etc. From 16.06.2005 to May 2009 the assesse realized Rs.32,59,11,561/- and the amount of Service Tax payable thereon works out to Rs.3,99,60,537/- as detailed in Annexure-I to this notice. 8. It is very much clear that the appellant is a promoter of residential projects. The Board vide Circular dated 29.01.2009 has clarified that a Promoter/Developer/Builder is not liable to pay service tax for Construction of Residential Complex Services prior to 01.07.2010. The Tribunal in the case of M/s.Krishna Homes Vs. Commissioner of Central Excise 2014 (34) STR 881 held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had entered into agreements for construction of the residential units and whose possession was to be handed over on completion of the construction and full payment having been made by the customers. It is seen that on this point, the Tax Research Unit of the Central Board of Excise Customs, which is a wing of the C.B.E. C. dealing with legislation work, had vide Circular No. 332/35/2006-TRU, dated 1-8-2006 clarified that in case where a builder, promoter, developer builds a residential complex having more than 12 residential units by engaging a contractor for construction of such residential complex, the contractor shall be liable to pay Service Tax on the gross amount charged for the construction service provided to the builder/promoter/developer under construction of complex service falling under Section 65(105)(zzzh) of the Finance Act, 1994 and that if no person is engaged by the builder, promoter, developer for construction work who undertakes construction work on his own without engaging the services of any other person than in such cases, in absence of the service provider and service recipient relationship, the question of providing taxable service to any person by any othe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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