Construction of complex services are not liable for service tax prior to 01.07.2010, as per Circular Nos. 108/02/2009-ST and 151/2/2012-ST and the subsequent amendment to Section 65(105)(zzzh) of the Finance Act, 1994.

Final Order Nos. 20440-20441 /2026

Date of Hearing: 03.03.2026

Date of Decision:03.03.2026

Per: Pullela Nageswara Rao

These 2(two) appeals are filed against Order-in-Appeal No. COC-EXCUS-000-APP-019 to 021-15-16 dated 28.04.2015 passed by the Commissioner of Central Excise, Customs & Service Tax (Appeals), Cochin.

The issue involved in the present appeals is whether the services under dispute classified as "construction of complex service" as per Section 65(30a) read with section 65 (105) (zzzh) of the Finance Act, 1994 are exempt from service tax during the relevant period.

The brief facts of the case are, the appellant M/s. Sree Chakra Living Space is a builder and developer in Cochin engaged in construction and selling of residential flats and is registered under "construction of residential complex service". The appellant enters into agreements with prospective customers for construction of dwelling units in a residential complex being composite contracts of construction involving supply of goods and services. The department alleging that the appellant is liable to pay service tax for the services of ’construction of residential complex’ issued a show cause notice (SCN dated 12.05.2011. The learned Adjudicating Authority vide Orders-in-Original dated confirmed the 2(two) demands of Rs.86,675/- and Rs.1,52,463/- along with interest under section 75 and imposed penalties under sections 76 and 77, on the ground that the appellant is not entitled to exemption as per Circular No 108/02/2009-ST dated 29.01.2009 and that the appellant is not the actual owner of the properties and they have only possessory right to develop the land and construction of the building, therefore the service rendered by the appellant cannot be considered as self-service, hence the exemption in terms of the Board Circular No. 108/02/2009-ST dated 29.01.200 cannot be extended to the appellant. Aggrieved by the Orders-in-Original appellant filed appeals before Commissioner (Appeals), who vide the common impugned order dated 28.04.2015, dismissed the appeals of the Appellant and upheld the Order-in-Originals. Aggrieved by the impugned order appellant filed these appeals before this Tribunal.

Details of the 2(two) appeals are as under;

The above 2(two) appeals were filed against a combined Orders-in-Appeal dated 28.4.2015 passed by Commissioner (Appeals), Cochin, and involve common issues.

The learned counsel for the appellant during the hearing as regards the applicability of Circular No. 108/02/2009-ST dated 29.01.2009, submits that; the Hon’ble Bangalore Tribunal and other benches have held that builders and developers are not liable for service tax for the period up to 01.07.2010 based on the Circular No. 108/02/2009-ST dated 29.01.2009 and 151/2/2012-ST dated 10.02.2012 and also as per the amendment to section 65(105) (zzzh) by the insertion of explanation from 01.07.2010, the relevant decisions are as below:

I. Skyline Builders (Trivandrum) Vs. Commissioner, Trivandrum-2025-TIOL-996-CESTAT-Bang-Final Order No. 20511/2025 dated 01.04.2025

II. CCE & ST Vs. Desai Homes Final Order No. 20226 /2025- dated 28.02.2025- (Tri-Blr)

III. Commissioner of C. Ex. & S.T., Bangalore-LTU Vs. Keerthi Estates Pvt. Ltd.- 2019 (26) G.S.T.L. 227 (Tri. - Bang.)

IV. Commr. Of Cus., C.E. & S.T., Visakhapatnam-I V