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2020 (2) TMI 632

..... the Central Government - Section 11B of the Central Excise Act, 1944 - HELD THAT:- If the petitioners were not liable to pay ‘service tax’ on the transaction of the purchase of the constructed area along with goods apart from undivided share of land at all, the payment which was made by the petitioners would not be a payment of service tax at all; that the department also could not have demanded payment of the same from the petitioners; and merely because the petitioners made the payment, it would not partake the character of ‘service tax’ and the department cannot retain the amount paid by the petitioners which was in fact not payable by them. Allegation that Documents were not produced before it as proof of payment of ‘service tax’ - HELD THAT:- The petitioners did not furnish any document to prove that the said service tax amount was actually deposited with the Central Government by 4th respondent is concerned, it is not in dispute that the 1st respondent never asked the petitioners to produce such material in the first place. It is also not the case of the 1st respondent that it had asked the 4th respondent, who according to the petitioner re .....

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..... n enacted by the Central Government dealing with determination of value of service portion in a composite contract of sale involving not only a service component but also sale of built up area along with undivided share of land involving also sale of goods included in the total consideration paid for their purchase falling in clause (b) of Sec.66 E, as in the instant case. Since the claim for refund is based on the decision of the Delhi High Court in Suresh Kumar Bansal’s case (1 supra) which was decided on 03.06.2016, and since the application for refund was filed on 19.08.2016, barely two months after the decision of the Delhi High Court in Suresh Kumar Bansal’s case (1 supra), it cannot be said that there is any inordinate delay in the petitioners seeking refund of the tax paid by them to the 4th respondent. Petition allowed - the 1st respondent is directed to refund a sum of ₹ 33,77,539/- to the petitioners with interest @ 9% per annum from the date of payment of the same by the petitioners to the 4th respondent i.e., 19.06.2014 till the date of payment to the petitioners. - WRIT PETITION No. 5980 of 2017 - 20-12-2019 - HONOURABLE SRI JUSTICE M.S.RAMACHANDRA R .....

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..... property included undivided share of land, and the claim of service tax on such transaction of immovable property by the respondents would be clearly outside the purview of the service tax regime as contained in the Act. 7. Petitioners filed an application with the 1st respondent on 19.08.2015 seeking refund of the said amount of ₹ 33,77,539/- from the 1st respondent. Petitioners enclosed required documents enclosing receipt of payment of service tax to the 4th respondent and also provided details of 4th respondent along with it s Service Tax Registration number and address to enable the 1st respondent to verify the payment and grant refund to the petitioners. 8. Petitioners had contended in the said application that they are entitled to the refund of service tax paid under mistake of law and the provisions under Section 11B of Central Excise Act, 1994 would apply to the refund under the service tax law as well. 9. The 1st respondent passed the impugned order on 24.10.2016 rejecting the claim of the petitioners for refund of the above amount on the following four(4) grounds: (a) The claim for refund is barred by limitation. (b) The petitioners did not furnish documents to pro .....

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..... pondent is filed along with Annexure P3 to the Writ Petition. 13. Section 11B of the Central Excise Act, 1944 deals with claims for refund of duty and interest if any paid on such duty. Under sub-Section(1) thereof, any person claiming refund of any duty and of interest, if any paid on such duty, may make such application for refund of duty and interest if any, paid on such duty to the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise, before the expiry of one year from the relevant date in such form and manner as may be prescribed; and the application shall be accompanied by such documentary or other evidence, including the documents referred to in Section 12A as the applicant may furnish to establish that the amount of duty of excise in relation to which such refund is claimed was collected from or paid by him; and the incidence of such duty and interest, if any, paid on such duty had not been passed on by him to any other person. 14. It is the contention of Sri Swaroop, counsel for respondents 1 to 3, that the said provision is applicable to the claim of refund made by the petitioners and therefore the claim of the petitioners is time barred. 15. .....

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..... ion of Residential Complex Service and was paying service tax. During the relevant period, the assessee had constructed various buildings for one A and had paid service tax on same. Subsequently, the assessee filed an application for refund of the service tax paid on the ground that the building construction, which was done by it for A , was a non-profit organization and it was not liable to pay such tax in the light of a circular No.80/10/2004, dt.17.09.2004. The Assistant Commissioner rejected the claim for refund on the ground that the application was filed beyond the period of limitation prescribed under Section 11B, though the amount paid by the assessee was not service tax, but it was in the nature of deposit with the Department. The High Court held that the amounts collected erroneously have to be returned to the assesssee. It also held that the claim of the petitioner that it was exempted from payment of service tax by virtue of Circular dt.17.09.2004 was not denied by the Department and it is not even denying that the nature of construction/services rendered by the petitioner was exempted from the payment of service tax; that one has to see, whether the amount paid by the .....

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..... t produced before it as proof of payment of service tax 20. With regard to the second ground in the impugned order that the petitioners did not furnish any document to prove that the said service tax amount was actually deposited with the Central Government by 4th respondent is concerned, it is not in dispute that the 1st respondent never asked the petitioners to produce such material in the first place. It is also not the case of the 1st respondent that it had asked the 4th respondent, who according to the petitioner received the said payment on 19.06.2014, as to whether the 4th respondent had credited the same to the Central Government or not. Also, it is not the case of the respondents that the vendor of the petitioners did not pass on the service tax collected from the petitioners to the Central Government. The petitioners had given even the service tax registration number of the vendor (4th respondent). Nothing prevented the 1st respondent from verifying whether the said payment of ₹ 33,77,539/- made by the petitioners on 19.06.2014 was passed on by the 4th respondent to the Central Government by verifying the Service Tax Returns filed by the 4th respondent. 21. In any e .....

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..... consideration is received after issuance of completion certificate by the competent authority. 27. Clause (h) of Section 66E mentions that the service portion in the execution of a works contract is also a declared service. 28. No doubt, the Service Tax (Determination of Value) Rules, 2006 were notified vide Notification No.12/06-ST, dt.19.04.2006 and were amended vide Notification No.11/2014-ST, dt.11.07.2014 w.e.f. 01.10.2014. The said Rules were framed in exercise of power conferred on the Central Government by clause AA of sub-Section (2) of Section 94 of the Act. 29. Rule 2A of the Service Tax (Determination of Value) Rules, 2006 deals with determination of value of service portion in the execution of a works contract mentioned only in clause(h) of Section 66E of the Act. 30. The petitioners claim that there is no rule framed by the Central Government in the above Rules to determine the value of service component in a composite contract for sale of immoveable property and goods including a service component mentioned in Clause (b) of Sec.66 E, it is the plea of the respondents that Rule 2A would apply to the situation as well. 31. We are of the opinion that Rule 2A of 2006 Ru .....

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..... the rules provides for any machinery for ascertaining the value of services involved in relation to construction of a complex. Referring to Rule 2A, Division Bench stated that it provides for mechanism to ascertain the value of services in a composite works contract involving services and goods, but it does not cater to determination of value of services in case of a composite contract which also involves sale of land. According to the Division Bench, the gross consideration charged by a builder/promoter of a project from a buyer would not only include an element of goods and services but also the value of undivided share of land which would be acquired by the buyer and since neither the Act nor the Rules framed therein provide for a machinery provision for excluding all components other than service components from ascertaining the measure of service tax, the same cannot be levied. 33. We are in complete agreement with the above view. 34. Though Sri Swaroop, counsel for respondents sought to contend that construction of the complex is also a works contract and falls under Section 66E(h), we do not accept the said interpretation because if such an interpretation was to be correct, .....

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