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TMI Blog2018 (7) TMI 1135X X X X Extracts X X X X X X X X Extracts X X X X ..... not be allowed to argue against the legal position rightly explained by the CBE&C itself which can certainly be invoked and applied by this Court for interpreting the provisions of law on the Principles of interpretation of Contemporenea Expositio and the Central Board of Excise and Customs or the highest Administrative body of the Respondent Department itself has interpreted the provisions that the construction activities of this nature where Bi-parte or Tri-partite Agreements are entered into is clearly indicated in the said Circular, which clearly and rightly hold the sub-contractors liable to pay the Service Tax as it is the Sub-contractor who actually undertakes the construction activity - In view of the undisputed factual matrix of the present case, that the sub-Contractor M/s. Larsen and Toubro Limited has duly discharged the obligations to pay the Service tax in the present Contract, we are at a loss to understand how the Revenue could again demand the Service Tax from the Respondent Assessee M/s. Nithesh Estates Limited, the Principal Contractor or the Developer, who did not undertake any construction activity in the present case. The learned Tribunal was perfectly justifi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation prescribed under Sec.73(1) of the Finance Act, 1994?" 3. The learned Tribunal, Customs, Excise & Service Tax Appellate Tribunal (CSTAT) by its impugned Order dated 16/07/2015 held in favour of the Respondent - Assessee M/s. Nithesh Estates Limited while allowing the appeal filed by the Respondent Assessee M/s. Nithesh Estates Limited that the Respondent Assessee was not liable to pay any Service Tax on the said construction activity as the said construction activity fell within the Exclusion Clause of the definition of 'Residential Complex' as defined in Section 65(91a) of the Finance Act, 1994. The Tribunal also relied upon the Circular of the Central Board of Excise and Customs, New Delhi dated 24/05/2010 which was extracted in its Order and which indicated that the 'Residential Complex' constructed for Central Government, Ministry of Urban Development Department which engaged National Building Construction Corporation (NBCC) for such construction would not be exigible to Service Tax as NBCC provides service to the Government of India for its personal use. It was also clarified in the same Circular dated 24/05/2010 that the main contract of NBCC where it en ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he construction, then the sub- contractor would be liable to pay Service Tax as in that case, NBCC would be the service receiver and the construction would not be for their personal use." It can be seen that if the land owner enters into a contract with a promoter/builder/ developer who himself provided service of design, planning and construction and if the property is used for personal use then such activity would not be subject to service tax. It is quite clear that CBE&C also has clarified that in cases like this, service tax need not be paid by the builder/developer who has constructed the complex. If the builder/ developer constructs the complex himself, there would be no liability of service tax at all. Further in this case it was different totally, the appellant, has engaged sub-contractors and therefore rightly all the sub-contractors have paid the service tax. In such a situation in our opinion, there is no liability on the appellant to pay the service tax. 8. Even though we have held in favour of the appellant on merits, the facts and circumstances in this case would show that appellant could have entertained a bonafide belief and therefore extended period could not ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Developer M/s. Nithesh Estates Limited shall pay the Works Contract Tax, Service Tax, Municipal Land Tax etc. in respect of the construction at the Site and the Project in question. 6. He urged that the construction of the 'Residential Complex' in question by the Sub- contractor, M/s. L & T Limited on which Service Tax Liability was also discharged and paid by L & T Limited to the Government, could not be taken as discharged of the liability to pay the Service Tax by the Respondent Assessee Developer M/s. Nithesh Estates Limited on the entire contracted sum, which are received by it during the relevant year involved in the present case from March 2007 to March 2008 amounted to ₹ 38.00 Crores approximately. He submitted that the said sum received from M/s. ITC limited by the Respondent assessee M/s. Nithesh Estates Limited was exigible to Service Tax for the said period, because the said construction activity did not fall within the Exclusion Clause of Section 65 (91a) of Finance Act, 1994, which defines 'Residential Complex' as under:- "Section 65(91a) "Residential Complex" means any complex comprising of- (i) a building or buildings, having more than twelve residenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ck exchange; (b) to (zzzg) … … … (zzzh): to any person, by any other person, in relation to construction of complex'] [Explanation : For the purposes of this sub- clause, construction of a complex which is intended for sale, wholly or partly, by a builder or any person authorized by the builder before, during or after construction (except in cases for which no sum is received from or on behalf of the prospective buyer by the builder or a person authorized by the builder before the grant of completion certificate by the authority competent to issue such certificate under any law for the time being in force) shall be deemed to be service provide by the builder to the buyer;] 10. He therefore submitted that the substantial questions of law arise from the Order of the learned Tribunal requiring interference by this Court in the present appeal. 11. Per contra, the learned counsel appearing for the Respondent - Assessee, Mr. K.S.Ravishankar submitted before us that the Respondent Assessee M/s. Nithesh Estates Limited gave the construction activity in its entirety for the said 'Residential Complex' in question meant for occupation by the Managerial Staff of M/s. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of a residential complex with a promoter/builder/developer, who himself provides service of design, planning and construction; and after such construction the ultimate owner receives such property for his personal use, then such activity would not be subjected to service tax, because this case would fall under the exclusion provided in the definition of 'residential complex'. However, in both these situations, if services of any person like contractor, designer or a similar service provider are received, then such a person would be liable to pay service tax. 4. All pending cases may be disposed of accordingly. Any decision by the Advance Ruling Authority in a specific case, which is contrary to the foregoing views, would have limited application to that case only. In case any difficulty is faced in implementing these instructions, the same may be brought to the notice of the undersigned." 14. The learned counsel for the Respondent Assessee also relied upon the Circular dated 24/05/2010 quoted by the learned Tribunal in its impugned Order itself and submitted that the Principal Contractor, viz. M/s. Nithesh Estates Limited did not provide any service of construction activity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Limited to M/s. Larsen and Toubro Limited is not disputed by the Revenue. It is also not disputed that due Service Tax on the payments made to the sub- contractor M/s. L & T Limited stood paid to the Government. 19. The Central Board of Excise and Customs (CBE&C) for the pre-amendment period prior to 01/07/2010 has issued the aforesaid Circular No.108/2/2009-S.T. dated 29/01/2009 clarifying this position, that in such cases, where the ultimate owner (M/s. ITC Limited in the present case) enters into a Contract for construction of a 'Residential Complex' with the Promoter/Builder/Developer (M/s. Nithesh Estates Limited in the present case) which itself provides service of Design, Planning and Construction and after such construction, the ultimate owner receives such property for 'Personal use', then such activity would not be subjected to Service Tax, because this case would fall under the 'Exclusion Clause' provided in the definition of 'Residential Complex'. 20. However, in such a situation, if the Service of any person like the Contractor or a similar Service Provider (M/s.Larsen & Toubro Limited in the present case) is received, then such a person (M/s. L & T Limited. in the ..... 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