Modi Ventures Vs Commissioner of Central Tax (CESTAT Hyderabad)
The appellant, a builder of flats under the project named Gulmohar Gardens, acquired land, constructed flats to some extent and sold them to prospective buyers under two separate agreements: a sale deed for sale of undivided interest in land along with an incomplete structure, on which appropriate stamp duty was paid, and a construction agreement for completion of the flat according to the customers’ requirements. The appellant had initially registered under “construction of complex service” and discharged service tax, but subsequently discontinued payment after relying upon CBEC Circular No. 108/2/2009-ST dated 29.01.2009.
A show cause notice dated 24.10.2011 demanded service tax of Rs 1,38,13,576/- including cess for the period 01.06.2007 to 31.12.2010, together with interest and penalties under Sections 78 and 77(2) of the Finance Act, 1994. The adjudicating authority confirmed the demand, interest and penalties. Before the Tribunal, the appellant contended, inter alia, that service tax was not leviable before 01.07.2010; construction services provided for personal use were excluded from “construction of residential complex service”; certain amounts such as corpus fund, electricity charges, stamp duty, registration charges and VAT had been wrongly included in the taxable amount; the extended period was not invocable; and interest and penalties were not imposable.
