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Mera Baba Realty Associate (P) Ltd. Versus Commissioner of Service Tax, Delhi

2016 (9) TMI 790 - DELHI HIGH COURT

Refund claim - Did the Tribunal fall into error in holding that the refund claim made by the appellant was not maintainable - construction activity - appellant deposited Service tax under protest - Held that:- the CESTAT clearly fell into error of law. The proviso to Section 11B clearly indicates that if the amounts are paid under protest, the limitation prescribed by the main portion, i.e. Section 11B(1) would not apply. Even otherwise, once it is admitted that the levy itself came into force w .....

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of the appellant becoming aware that the amounts were not recoverable as Service Tax. That is sufficient to attract proviso to Section 11B(1). - Decided in favour of appellant - SERTA 26/2016, C.M. APPL.32831/2016 - Dated:- 7-9-2016 - S. Ravindra Bhat And Deepa Sharma, JJ. For the Appellant : Sh. Ruchir Bhatia, Advocate For the Respondent : Sh. Pramod Kumar Rai, Sr.Standing Counsel with Sh. Deepak Anand, Jr. Standing Counsel JUDGMENT Mr. Justice S. Ravindra Bhat (Open Court) 1. Following questio .....

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rcular dated 16.02.2006, the effect of which was to advise all construction companies to pay Service Tax. The appellant complied and started depositing amounts for the periods in question, i.e. from 2006 onwards. On 24.04.2007, the appellant protested, contending that the amounts paid by them were not covered by the levy and that they had to be refunded the said amounts. The said letter reads as follows: To, The Superintendent, Service Tax Division I Delhi. Sub: Payment of service tax in protest .....

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we are not liable to pay the service tax. However, we are depositing the service tax in protest with the condition that in case it is decided in favour of builder, the same would be refunded to us. It is further submitted that, it is not applicable to the case at hand in as much as this decision was rendered on the facts of its own case, in our case, the company has not undertaken any construction work for and on behalf of proposed customer and the title, in the property so constructed, passes .....

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making construction for and on behalf of the probable customers. In view of the position explained above, you are requested to look into the matter and refund the service tax. Thanking you, 5. The appellant filed a refund claim on 26.02.2009, disclosing all the particulars, in the prescribed format, i.e. Form-R under Section 11B of the Central Excise Act, 1944. This claim was rejected in its entirety. The order-in-original observed as follows: ORDER In view of the above discussions & findin .....

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ary adjudicating authority was of the opinion that the application was time-barred. He took into account the fact that the assessee had voluntarily obtained registration and deposited amounts without protest and much later claimed that such amounts were not leviable. The order-in-original further observes that in the circumstances, there is no question of any amount being refunded. The first appellate authority took note of previous orders of Central Excise and Service Tax Appellate Tribunal (CE .....

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Finance Act, 1994 with effect from 01.07.2010, the amounts could be recovered only prospectively and not from a prior period. To this end, the CESTAT relied upon the decision reported as Union Bank of India v. M/s. Martin Lottery Agency Ltd. 2009-TIOL-60-SC-ST; Indian National Shipowners Association v. UOI 2009 (14) STR 289 (Bom) etc. The appellate authority also took into consideration the Central Board of Excise and Customs Circular No.108/02/2009-ST dated 29.01.2009 and then concluded as fol .....

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ding the earlier entry. It is not a carve out of the earlier entry. Therefore, the services rendered by the members of the 1st petitioner cannot be brought to tax under that entry. In view of the above explanations inserted in the Section 65(105)(zzq) and (zzzh) w.e.f. 01.07.2010 and clarifications given by CBEC vide Letter D.O.F. No.334/03/2010-TRU dated 1-7-2010, it is amply clear that if an agreement is entered into or any payment is received, for sale of complex or apartment in residential c .....

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7.2010 and were not taxable during the period prior to 01.07.2010 and the Service Tax paid by them during the period prior to 01.07.2010 was liable to be refunded to the appellants in terms of provisions of Section 11B of the Central Excise Act, 1944 as made applicable to like matters of Service Tax by virtue of Section 83 of the Finance Act, 1994. 8. In view of the above, I set aside the impugned order and allow the appeal with consequential relief. Sd/- (V.K. SINGH KUSHWAH) COMMISSIONER (APPEA .....

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ntended on behalf of the appellant that the amounts deposited prior to 24.04.2007 were covered by the refund claim and that the letter of the appellant made it clear that the amounts deposited in the past and payable thereafter were also under protest. It was submitted that since there is no denial of the fact that the levy was imposed for the first time by the amendment to the Finance Act, 1994 with effect from 01.07.2010, the amounts collected under the colour of a lawful expression could not .....

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at the appellant had made a refund claim in the appropriate form for the first time in 2009 is not denied. That it had also deposited and continued to deposit service tax amounts despite its understanding and claim that they were not liable is also not disputed. In the circumstances, there was no question of applicability of proviso to Section 11B and refund claim ought to have been made within the time prescribed. Since the refund claim here was neither in appropriate format nor unequivocal abo .....

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