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2015 (12) TMI 1573 - CESTAT BANGALORE

2015 (12) TMI 1573 - CESTAT BANGALORE - 2016 (43) S.T.R. 301 (Tri. - Bang.) - Refund claim - Circular No. 108/02/2009, dated 29-1-2009 - non-leviability of service tax for the transactions made with the buyers of the flats - service tax paid by mistake of law and appellant had not collected the same from the customer/buyers - Held that:- this special kind of agreement, where the builder has not sold the flat directly but made the buyers as owners of the land and those owners in turn entered into .....

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ice of construction of complex. - The service in question is not liable for payment of service tax and the appellant’s claim for refund would deserve examination and consideration as per the provisions of law as applicable during the relevant period. It is made clear that service is definitely under the exclusion category and not liabile for payment of service tax. This appeal is allowed by way of remand to the original adjudicating authority for examination and consideration of refund clai .....

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tax. This appeal is allowed by way of remand to the original adjudicating authority for examination and consideration of refund claim under the provisions of refund claims wherein the adjudicating authority will also examine the claim under both the criteria i.e. time bar as well as ‘unjust enrichment’.the service in question is not liable for payment of service tax and the appellant’s claim for refund would deserve examination and consideration as per the provisions of law as applicable during .....

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rder No. 22137/2015- Dated:- 4-12-2015 - Shri Ashok K. Arya, Member (T) Shri Vinayaka, Advocate, Vishnu Daya & Co., for the Appellant. Shri Ajay Saxena, AR, for the Respondent. ORDER Both parties have been heard in detail. The matter concerns with the admissibility of the refund claim filed by the appellant namely Kirthi Constructions, Bangalore before the Revenue. The appellant claims that this refund claim had arisen on account of non-leviability of service tax for the transactions made wi .....

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1a) of the Finance Act, 1994. The appellant states that they paid service tax by mistake of law and deserves to be laid claim of refund of the said tax paid earlier mistakenly. 2. The appellant states that they have two agreements with the class of buyers of these flats; one is for transferring undivided share in the land for each buyer (agreement to sell land) and another is for construction of flats (construction agreement) wherein the appellant would be constructing flats for each buyer, .....

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o arguing that their claim cannot be taken as time barred as they paid the tax by mistake of law and they had not collected the same from the customer/buyers. The appellant cites the decision of Hon ble High Court in the case of Geojit BNP Paribas Financial Services Ltd. v. CCE, Cus. & S.T., Kochi [2015 (39) S.T.R. 706 (Ker.)] in support saying that the period of limitation will not arise as the service tax was paid by mistake. 2.2 The appellant also argues that there has been amendment .....

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h paid mistakenly, was never passed on to their customers/buyers; they have the certificate(s) also from their buyers to this effect. 3. The learned AR Mr. Ajay Saxena appearing for the Revenue vehemently argues that the services i.e. the activities and transactions in question are liable to service tax under the construction of residential complex service as the activities and transactions are not self-service and are not covered by exclusion clause of Section 65(91a) of the Finance Act, 1 .....

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Ltd. v. UOI [1997 (89) E.L.T. 247 (S.C.)] in support especially for rejection of claim of the refund saying that as the tax has already been collected by the appellant, they have to follow the provisions wherein refund claim is to be examined mainly under Section 11B of Central Excise Act which has been made applicable to service tax by virtue of Section 83 of the Finance Act, 1994; further saying that limitation period of one year from the relevant date is certainly applicable for the refund c .....

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he facts on record and the submissions of both sides, the main issue which emerged is as follows : Whether the impugned transactions and activities (i.e. services in question) are liable for payment of service tax and whether these services would come under the exclusion clause of Section 65(91a) of the Finance Act, 1994 and whether the clarification issued by Circular No. 108/2/2009-S.T., dated 29-1-2009 by the Ministry of Finance in its Para 3 covers these for declaring them as not liable to p .....

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ellant made two simultaneous agreements with the flat buyers; one for transferring undivided share in the land to the buyers and another for doing construction on behalf of flat buyers (construction agreement). Before we go further, let us refer to the definition of residential complex as given in Section 65(91a) of the Finance Act, 1994, which says as follows :- Residential complex means any complex comprising of - (i) A building or buildings, having more than twelve residential units; (ii) A c .....

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as residence by such person. Explanation : For the removal of doubts, it is hereby declared that for the purposes of this clause, - (a) personal use includes permitting the complex for use as residence by another person on rent or without consideration; (b) residential unit means a single house or a single apartment intended for use as a place of residence; This definition of residential complex says that it does not include a complex constructed by a person directly engaging another person for .....

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finition of residential complex as given in Section 65(91a) of the Finance Act, 1994. Here they have given undivided share in the land to the flat buyers which means that those flat buyers are to be treated as owners of the land and when the same buyers signed an agreement with the said builder appellant for construction of flats; it may be called that those flat buyers are engaging this builder for designing or planning of the layout and construction of such complex which is intended for person .....

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ransactions in question would not attract liability of payment of service tax under the service of construction of complex service as per the provisions of Section 65(105)(zzzh) which defines the taxable service of construction of complex. Of course the situation may be different after 1-7-2010, the date with effect from which an Explanation has been added to Section 65(105)(zzzh) of the Finance Act, 2010 (14 of 2010) dated 8-5-2010 and made effective from 1-7-2010 vide Notification No. 24/2010- .....

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kenly, time-bar limitation is not applicable. Learned AR for the Revenue has vehemently argued that provisions of law concerning the sanction of refund under Service Tax law would be applicable and he has cited in support various decisions of Hon ble Supreme Court as well as CESTAT, Bangalore. It is made clear that when the refund claim is to be examined, it would be necessary for the claim to pass all the tests including the time limitation of one year as well as satisfying the criterion that t .....

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