2016 (1) TMI 160 - AT - Service Tax

Claim of refund of service tax paid wrongly by the sub-contractor - For construction of such school building appellants have engaged a sub-contractor for excavation for the foundation of the school building - It was the plea of the appellant before the lower authorities that the activities undertaken by the sub-contractor is in respect of construction of the school building and should be seen as such, the refund claim is to be allowed on the ground of construction of educational institutions which are excluded from the definition of Commercial or Industrial Construction Service. Held that - The sub-contractor having not contested the classification, the appellant cannot come before the authority and say that the refund has to be granted as these services are in respect of construction of school building and in effect wants to make the classification under Commercial and Industrial Construction Service . We find that the argument of the appellant is based on the decision of the Tribunal in the case of ITD Cementation India Ltd. vs. Commissioner of Service Tax - 2014 (8) TMI 97 - CESTAT MUMBAI and Radius Corporation Ltd. vs. Commissioner of Central Excise, Raipur 2013 (9) TMI 517 - CESTAT NEW DELHI are misplaced inasmuch as in both the cases the appellants therein was given EPC contract for undertaking the entire work and the demands were made by bifurcating the same. Refund was rightly denied - Decided against the assessee.

Summary

Issues involved: Refund of improperly paid service tax for construction of school building.

Analysis:
1. Refund Claim Basis: The appellant sought a refund of Rs. 5,91,174, claiming it was improperly paid as service tax. The construction of a school building involved engaging a sub-contractor for excavation, who paid service tax under Site Formation and Excavation Service category.

2. Appellant's Argument: The appellant argued that the sub-contractor's activities were part of school building construction and should be excluded from Commercial or Industrial Construction Service definition, warranting a refund. However, the classification of the sub-contractor's service was undisputed, and the department had accepted the service tax liability under Site Formation and Excavation Service.

3. Judicial Analysis: The tribunal found the appellant's argument flawed for several reasons. Firstly, the sub-contractor's service tax classification was accepted, and the appellant could not contest it post-facto. The appellant's reliance on previous tribunal decisions was deemed misplaced as those cases involved EPC contracts, unlike the current situation. Consequently, the impugned order was upheld as correct and legal, requiring no intervention.

4. Decision: The appeal for refund was rejected, and the Revenue's cross-objection in support of the impugned order was also disposed of. The tribunal's decision was based on the specific facts and legal interpretation of the case, emphasizing the importance of accurate service tax classification and contractual distinctions in determining refund eligibility.