No Service Tax u/s 66E(b) of Finance Act Leviable if Partial Completion & Occupancy Certificates received on Flat Project: CESTAT

The Kolkata Bench of the Customs Excise & Service Tax Appellate Tribunal (CESTAT) ruled that no service tax under Section 66E(b) of the Finance Act, 1994, is leviable if partial completion and occupancy certificates are received on a flat project. The case involved MCK PGE Projects LLP, which received partial completion and occupancy certificates for its residential project “Astitva” in Kolkata. The Revenue had demanded service tax of Rs. 38,11,194 on the sale of flats, citing Section 66E(b) and Notification No. 09/2013-S.T. The appellant argued that they did not avail CENVAT credit for the flats sold and were not liable to pay service tax. The tribunal observed that the project had reached a stage allowing occupancy and sale, thus exempting it from service tax. Consequently, the tribunal set aside the demand for service tax along with associated interest and penalties, allowing the appellant’s appeal with consequential relief.