2023 (6) TMI 1000 - CESTAT AHMEDABAD

Rejection of refund of Service Tax paid on construction activity - appellant is recipient of service - non-commercial organization or not - HELD THAT:- With regard to the issue, as to whether, the service recipient can claim refund of service tax, the Hon’ble Allahabad High Court, in the case of COMMISSIONER OF CUSTOMS CENTRAL EXCISE & SERVICE TAX VERSUS M/S. INDIAN FARMERS FERTILIZERS COOPERATIVE LTD. [2014 (7) TMI 891 - ALLAHABAD HIGH COURT], have ruled in affirmative.

It is also noticed that Section11B(2)(e) of the Central Excise Act, 1944 permit the person who has borne the tax, can file the refund claim.The case laws cited by the learned Advocate strengthen the view that it is not necessary that the refund claim should be filed only by the service provider /manufacturer. The person who has borne the duty burden can also claim the refund. There is absolutely no restriction in the provision of law. In the present matter contractor collected the service tax separately from the Appellant and deposited to the Central Government Account - Since the Service tax has been borne by the Appellant, they have rightly lodged the refund claim.

In view of the various documentary evidence and certificates and registrations of the Appellants and analysis thereof and also considering the observations of the ld. Commissioner (Appeals) on this, there is no doubt that building constructed by the Contractor is medical college building - it is also noticed that the Appellant have been granted registration of Trust under Section 12AA of the Income Tax Act which shows that Appellant have been registered for non-commercial purpose. Since the organization of the appellant itself is non-profit purpose, it cannot be said that the building is used for commercial activity. Therefore we do not agree with the finding of the Ld. Commissioner that the activity of running medical college is nothing but a commercial one and same cannot be construed as non-commercial activity/ organization.

C.B.E. & C. had issued Circular No. 80/10/2004-S.T., dated 17-9-2004 and in Para 13.2 clarified that the leviability of Service Tax was primarily dependent upon the use of the building or civil structure. Further, it clarified that it was to be ascertained where building or civil structure was used or to be used for commercial or industrial purpose and further required to gather the information as to whether the buildings or civil structures were being used or to be used for the purpose of making profit or not and clarified that if the building or civil structure was used or to be used not for the purposes of profit then the same are not taxable.

Thus, it is settled that merely by charging a higher fees an institution cannot be treated as commercial institute accordingly the reasoning on this count of the Lower Authority is absolutely illegal and incorrect.

Appeal allowed.