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2023 (4) TMI 9

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..... tallation of original works pertaining to a single residential unit otherwise than as a part of a residential 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. 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 - Commissioner (Appeals) was, therefore, not justified in rejecting the refund claim of the appellant on the ground of unjust enrichment. Appeal allowed. - Service Tax Appeal No. 50485 of 2017, 50496 of 2017, 50497 of 2017 and 50524 of 2017 - FINAL ORDER NO. 50234-50237/2023 - Dated:- 22-2-2023 - MR. DILIP GUPTA, PRESIDENT AND MR. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Shri O.P. Agarwal, Advocates for the Appellant Shri Ravi Kapoor, Authorized Representative of the Department ORDER These four appeals seek t .....

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..... ax on reverse charge mechanism in terms of the Notification dated June 20, 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 July 01, 2012 and was exempted under the Notification dated June 20, 2012. 7. The finding recorded by the Commissioner (Appeals) to reject the claim of appellant is as follows: On examination of copy of these work orders submitted by the appellant, I find that it has not been mentioned in the work orders that the construction is for independent and individual residential units which are not part of residential complex. Further I find that in order to substantiate their claim the appellant has not submitted any photographs or drawing design etc. relating to this project on the basis of which it can be substantiated that the residential units constructed are not part of residential complex. On the contrary a bare perusal of work order no. 2121 dated 8.03.2013 it is clear that 20 Nos. of residential units have been constructed in residential complex at Manpura Scheme, Abu Road and a bare perusal of work order No. 1616 dated 23.09.2013 c .....

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..... ly 01, 2012. 13. The appellant had constructed residential houses for the Housing Board. Section 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 . 14. 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. 15. 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 compr .....

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..... ves to be accepted. In this connection reliance can be placed on a Division Bench judgment of the Tribunal in Macro Marvel Projects Ltd. v/s 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 .....

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..... dly in the present case, the 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) 23. The same view was taken by a Division Bench of the Tribunal in Quality Builders Contractor. 24. 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 .....

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..... 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 Indian Farmers Fertilizers Coop. Ltd. 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 June 20, 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. 28. In Service Tax Appeal No. 50496 of 2017, the appellant constructed ground plus three floor house prior to July 01, 2012 as per the work order and the construction was completed on December 31, 2013 as per the certificate dated January 28, 2022 issued by the Rajasthan Houses Board. Thus, the concerned building had four residential units which would be less than .....

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