2018 (5) TMI 783 - AT - Service Tax

Refund of service tax paid to the builder - refund claimed by the recipient of services (buyer of flat) - refund application filed was rejected on the ground that the respondent was not the petitioner before the Hon ble Delhi High Court 2016 (6) TMI 192 - DELHI HIGH COURT - Held that - composite contract in relation to construction of complex, should not be subjected to levy of service tax on the service defined under Section 65 (105) (zzzh) of the Act. In other words, who so ever provides such service, which is composite in nature, shall not be liable to pay service tax Claiming of the benefit of the judgment, 2016 (6) TMI 192 - DELHI HIGH COURT , cannot be denied to the appellant as the same was rendered in rem and not in personem . - Refund cannot be denied - decided against Revenue.

Summary

Issues:
Levy of service tax on composite contract for construction of complex under Section 65 (105) (zzzh) of the Finance Act, 1994.
Interpretation of the judgment by the Hon'ble Delhi High Court regarding the non-levy of service tax on composite contracts.
Applicability of the judgment to the refund application filed by the respondent.

Analysis:
The case involved a dispute over the levy of service tax on a composite contract for construction of a complex as defined under Section 65 (105) (zzzh) of the Finance Act, 1994. The respondent had filed a refund application based on a judgment by the Hon'ble Delhi High Court in a related case. The High Court had ruled on June 3, 2016, that no service tax should be charged on composite contracts. The respondent's refund application was initially rejected on the grounds that they were not a petitioner in the High Court case. However, the Commissioner (Appeals) set aside the original order and allowed the appeal, remanding it to the Adjudicating Authority.

Upon reviewing the High Court's judgment, it was clear that composite contracts for the construction of a complex should not be subject to service tax under Section 65 (105) (zzzh) of the Act. The judgment applied to all similar cases, not just to the specific petitioners involved. Therefore, the respondent was entitled to benefit from the judgment, and the impugned order setting aside the adjudication order and allowing the appeal was upheld.

Ultimately, the appeal by the Revenue was dismissed, affirming the decision in favor of the respondent. The judgment emphasized the principle that service tax should not be levied on composite contracts for the construction of a complex, as per the interpretation of the relevant legal provisions and the High Court's ruling.