Nagarjuna Homes Vs Commissioner of Central Tax (CESTAT Hyderabad)
The CESTAT Hyderabad examined an appeal concerning service tax demand of ₹18,80,612/- on a builder engaged in construction of residential complexes. The dispute arose from the department’s allegation that the appellant received ₹7.30 crore towards sale of flats during 2011–12 and that such receipts were liable to service tax as construction services.
The adjudicating authority and Commissioner (Appeals) doubted the appellant’s claim that the entire consideration was received after issuance of the completion certificate. It was observed that the amounts received exceeded the values stated in the sale deeds, indicating that flats were only semi-finished at the time of execution. It was also noted that payments were received even after execution of sale deeds and that there were discrepancies between ledger values and sale deed amounts. Based on these findings, the demand was confirmed.
The appellant contended that all payments were received only after issuance of completion certificates by competent local authorities. It argued that there was no dispute regarding the validity of such certificates and that the authorities had incorrectly relied on procedures applicable to other bodies, such as GHMC, which were not relevant in this case.
The Tribunal identified the key issue as whether the amounts received were actually post-completion certificate. It noted that the completion certificates in question were issued by competent local authorities and that the department had not challenged their validity. Therefore, the certificates were to be treated as valid.
