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TMI Blog2019 (1) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... contracted the entire construction activity to M/s Indu Projets Ltd (IPL). IPL paid service tax on the amounts which they received for the construction from the appellant. The appellant, in turn, availed CENVAT credit of such service tax paid by IPL and utilized it for payment of service tax. The appellant were registered as 'works contract service' provider with the department and they charged their customers service tax and paid service tax under Works Contract (Composition scheme for payment of Service Tax) Rules, 2007 by utilizing the CENVAT credit so taken and also partly in cash. The appellant, vide their letter dated 20.04.2008, explained to the department that as per CBEC circulars they are not liable to pay service tax but they continued to collect from their clients service tax and paid it to the department partly using the CENVAT credit and partly in cash. A show cause notice was issued to the appellant in which it was alleged that they are not liable to pay service tax as they were not rendering any service at all. As the appellant was not rendering any service to their clients, they were not liable to pay service tax on 'works contract service' or under commercial cons ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e recipient between the builder and promoter. In this case, APHB is selling the undivided share of land along with semi finished structures to the buyers and thereafter the buyers entered into construction agreement with the appellant/builder or promoter. Hence, there is a service provider and recipient relationship and circulars, dated 01.08.2006 and 23.08.2007 are not applicable to their case. The extracts of these circulars are below: Sr. No. Issue Legal Position 1. Is service tax applicable on Builder, Promoter or Developer who builds a residential complex with the services of his own staff and employing direct labour or petty labour contractors whose total bill does not increase 4.0 lacs in one P/Y? In a case, where the builder, promoter or developer builds a residential complex, having more than 12 residential units, by engaging a contractor for construction of such residential complex, the contractor shall be liable to pay service tax on the gross amount charged for the construction services provided, to the builder/ promoter/ developer under 'construction of complex' service falling under Section 65(105)(zzzh) of the Finance Act, 1994. If no other person is engaged f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .01.2009 exemption is available only if the builder constructs and such construction is for the personal use of the ultimate owner. He would further submit that although the appellant is not liable to pay service tax in the instant case, in view of lack of clarity they chose to pay service tax under protest and avail CENVAT credit of the service tax paid by their contractor M/s IPL. He would argue that any demand under Sec.73A can be paid using CENVAT credit. In support of his argument they have relied on the following case laws: (i) Inductotherm India Pvt Ltd [2007 (216) ELT 40] in which appellant voluntarily paid Central Excise Duty than so required using CENVAT credit and the demand under Sec.11D was set aside by the Tribunal. (ii) Oosypine Mar-Pack Ltd [2010 (255) ELT127] in which appellant paid excess Excise Duty using CENVAT credit and the demand under Sec.11D was set aside by the Tribunal. (iii) Rasoi Ltd [2009 (247) ELT 174] in which duty was paid using money credit for a demand under Sec.11D. (iv) Unison Metals [2006 (204) ELT 323] (v) Sterlite Industries India Ltd [2008 (225) ELT 397] (vi) Silvassa Wooden Drums [2005 (184) ELT 392] (vii) Syndet India [2004 (166) EL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovation or restoration of, or similar services, in relation to (b) and (c); or (e) Turnkey projects including engineering, procurement and construction or commissioning (EPC) projects" 9. The appellant has undertaken to complete semi-built houses as per the copies of Construction Agreement produced by them before us. They are neither residential complexes nor new buildings or civil structures for commerce or industry. Therefore, they are clearly, not covered under the definition of Works Contract Service. The five member Constitutional Bench of the Hon'ble Supreme Court in their judgment in Civil Appeal No.3327 of 2017 (CC, Mumbai Vs M/s Dilip Kumar & Co and others) ruled: "43. ............... There cannot be any implied concept either in identifying the subject of the tax or person liable to pay tax. That is why it is often said that subject is not to be taxed, unless the words of the statute unambiguously impose a tax on him, that one has to look merely at the words clearly stated and that there is no room for any intendment nor presumption as to tax. It is only the letter of the law and not the spirit of the law to guide the interpreter to decide the liability to tax ignori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stions of law framed by the Hon'ble High Court were: "a. Whether, in the facts and in the circumstances of the case, the Tribunal is justified in holding that provision of Section 11D are not applicable in the instant case? b. Whether, in the facts and in the circumstances of the case, the Tribunal is justified in holding that the amount deposited by the respondent by making a debit entry as Cenvat Credit account amounts to payment of duty as required under Section 11D of the Central Excise Act, 1944?" Both the above questions were answered in negative i.e., in favour of the department and against the assessee by the Hon'ble High Court. Thus, the appellant has to deposit the amount collected from its clients under Sec.73A(2) and cannot use CENVAT credit for the purpose. The amount already collected in cash gets adjusted against this amount and the appellant is liable to deposit the rest. 12. As we have already held that the appellant is not entitled to take CENVAT credit, the same needs to be recovered from them. As they have already reversed the same (as payment of 'service tax' through CENVAT account), nothing more needs to be recovered on this account. Interest, if any, un ..... 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