TMI Blog2023 (7) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... complex have been exempted - the Commissioner (Appeals) was not justified in holding that the appellant would not be entitled to the benefit of the Exemption Notification. Principles of unjust enrichment - HELD THAT:- The Commissioner (Appeals) was also not justified in holding that the refund was hit by the principles of unjust enrichment. As per the work orders, service tax was to be borne by the appellant and the Commissioner (Appeals) has also found, as a fact, that the contract awarded by the Housing Board to the appellant mentions that service tax shall be borne by the contractor - The Allahabad High Court in COMMISSIONER OF CUSTOMS CENTRAL EXCISE SERVICE TAX VERSUS M/S. INDIAN FARMERS FERTILIZERS COOPERATIVE LTD. [ 2014 (7) TMI 891 - ALLAHABAD HIGH COURT ] held that a refund can be claimed by a person who has borne the incidence of tax. Even in accordance with the Exemption Notification dated 20.06.2012, 50% of the tax to be deposited by the Housing Board under the reverse charge mechanism was deducted by the Housing Board from the amount payable to the appellant. The Commissioner (Appeals) was, therefore, not justified in rejecting the refund claim of the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t service tax was payable to prior 01.07.2012 and had not been exempted w.e.f. 01.07.2012 and that they were also hit by unjust enrichment. Except Service Tax Appeal No. 51458 of 2018, it was also held that the refund was barred by limitation. 5. The appellant claims that it had constructed individual/independent residential houses (stand alone house) as per the work orders given by the Rajasthan House Board [the Board] ; the Residential Engineer of the Board certified that the houses that were constructed were individual residences having independent approach and entry with separate electricity and water connection; and the appellant had deposited service tax on such constructed houses by mistake and the Board had also deposited 50% of service tax on reverse charge mechanism in terms of the Notification dated 20.06.2012. 6. According to the appellant, as the tax was deposited by mistake since the construction of individual/independent residential houses was not taxable prior to 01.07.2012 and was exempted under the Notification dated 20.06.2012. 7. The finding recorded by the Commissioner (Appeals) to reject the claim of appellant is as follows: 6.6. In view of the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 65(105)(zzzh) of the Finance Act, 1994 [the Finance Act] provides that taxable service means any services provided or to be provided to any person, by any other person in relation to construction of complex . 13. Construction of complex has been defined in section 65(30a) of the Finance Act as follows: Section 65(30a) - Construction of Complex Construction of Complex means (a) Construction of a new residential complex or a part thereof; or (b) Completion and finishing services in relation to residential complex such as glazing, plastering, painting, floor and wall tiling, wall covering and wall papering, wood and metal joinery and carpentry, fencing and railing, construction of swimming pools, acoustic application or fittings and other similar services; or (c) Repair, alteration, renovation or restoration of, or similar services in relation to, residential complex. 14. A residential complex has been defined in section 65(91a) of the Finance Act as follows: Residential Complex - Section 65(91a) Residential Complex means any complex comprising of (i) a building or buildings, having more than 12 residential units; (ii) a com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Tribunal in Macro Marvel Projects Ltd. vs. Commissioner of Service Tax, Chennai [2008 (12) STR 603 (Tri.-Chennai)] wherein the demand of service tax was for the period 16 June, 2005 to November, 2005 under construction of complex service under section 65(30a) of the Act. The Bench examined the scope of construction of complex and the meaning of a residential complex under section 65(91a) of the Finance Act and the observations are as follows: It is abundantly clear from the above provisions that construction of residential complex having not more than 12 residential units is not sought to be taxed under the Finance Act, 1994. For the levy, it should be a residential complex comprising more than 12 residential units. Admittedly, in the present case, the appellants constructed individual residential houses, each being a residential unit, which fact is also clear from the photographs shown to us. In any case, it appears, the law makers did not want construction of individual residential units to be subject to levy of service tax. Unfortunately, this aspect was ignored by the lower authorities and hence the demand of service tax. In this view of the matter, we are also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant constructed individual residential houses, each block, being a residential unit which is an admitted fact. In any case, it appears that the legislature did not want to tax construction of individual residential units to the levy of service tax. We find that the learned Commissioner have erred in considering the approved plan for construction of more than 12 individual units on a large plot of land as a residential complex which we find is wrong and misconceived. Accordingly, we find that the show cause notice is not maintainable. Accordingly, we allow this appeal and set aside the impugned order. The appellant shall be entitled for consequential benefits in accordance with law. (emphasis supplied) 22. A Division Bench of the Tribunal in Shri A.S. Sikarwar vs. CCE, Indore [Service Tax Appeal No. 871 of 2011 decided on 20.04.2012] also observed that service tax can be demanded only if the building concerned has more than 12 residential units in the building and such levy will not apply in cases where one compound has many buildings, each having not more than 12 residential units. This decision of the Tribunal was also assailed before the Madhya Pradesh High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the Commissioner (Appeals) has also found, as a fact, that the contract awarded by the Housing Board to the appellant mentions that service tax shall be borne by the contractor. The Allahabad High Court in Commr. Of Cus., C. Ex. S.T. vs. Indian Farmers Fertilizers Coop. Ltd. [2014 (35) S.T.R. 492 (All.)] held that a refund can be claimed by a person who has borne the incidence of tax. Even in accordance with the Exemption Notification dated 20.06.2012, 50% of the tax to be deposited by the Housing Board under the reverse charge mechanism was deducted by the Housing Board from the amount payable to the appellant. The Commissioner (Appeals) was, therefore, not justified in rejecting the refund claim of the appellant on the ground of unjust enrichment. 26. The Commissioner (Appeals) also observed that the CENVAT credit for works contract services was admissible to the service receiver and, therefore, the Board may have taken the CENVAT credit and utilized the same for output services. It is for this reason also that refund was found to be not admissible. 27. In the first instance, this was not a ground taken in the show cause notice and secondly, the Commissioner (Appeals) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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