2016 (12) TMI 1328 - AT - Service Tax

Refund claim - Compounded Levy Scheme - Works Contract - construction of residential complex - rejection on the ground that the appellant is registered under Works Contract Service whereas the Board Circular is regarding Construction of Residential Complex Service - time bar - unjust enrichment - whether the Board Circular No. 108/02/2009 ST dated 29.01.2009 is applicable? - Held that - reliance placed on the decision of the case of Krishna Builders Vs. CCE Raipur 2009 (3) TMI 160 - CESTAT NEW DELHI where in the similar issue the matter was remanded for examination - matter on remand.

Summary

Issues:
1. Applicability of Board Circular No. 108/02/2009 ST dated 29.01.2009
2. Time-barred refund under Section 11B of the Central Excise Act

Analysis:
1. Applicability of Circular: The appellant, engaged in constructing a residential complex on their land and selling flats, had paid service tax under the 'Works Contract' category. The issue arose when Circular No. 108/02/2009 clarified that no service tax is applicable when constructing a residential complex on own land. The Assistant Commissioner rejected the refund application, citing the appellant's registration under 'Works Contract Service' and the Circular's inapplicability. However, the appellant cited various decisions supporting their claim. The Tribunal, after hearing both parties and considering the appellant's submissions, allowed the appeal, setting aside the impugned order. The matter was remanded for fresh examination in light of the cited observations.

2. Time-barred Refund: Another crucial issue was whether the refund application was time-barred under Section 11B of the Central Excise Act. The Assistant Commissioner rejected the refund partly on this ground, stating that the claim was made after one year from the payment of tax. However, the Tribunal did not explicitly address this issue in its order, focusing primarily on the applicability of the Circular. The Tribunal's decision to remand the matter for fresh examination implies that the issue of being time-barred may also be re-evaluated by the original authority.

In conclusion, the Tribunal's judgment in the present appeal primarily addressed the applicability of the Board Circular regarding the service tax on constructing a residential complex on own land, setting aside the earlier rejection and remanding the matter for further examination. The issue of the refund being time-barred was not explicitly resolved in the judgment but may be considered during the fresh examination by the original authority.