2019 (7) TMI 215 - AT - Service Tax

Refund of service tax paid - construction of residential house - more than 12 units or not - refund claimed as per the exemption provided under S.No.14 of N/N. 25/2012-ST dated 20.06.2012 - refund claim denied on the ground that exemption notification is not applicable in the present case, as the present project consisting of more than 12 Villas, is not a single residential unit - HELD THAT - In the present case, there is a separate agreement entered between the appellant and the contractor for construction of the individual house for which separate approval has been sanctioned. Further the definition of residential complex is not applicable in the present case because all the conditions which are required to be fulfilled for a complex to be residential complex are not fulfilled in the present case - the ground for rejection is that there are common facilities like park and roads but in view of the Relinquishment Deed produced on record, I find that these common facilities like parks and roads have been relinquished to the Government and hence the same is not the common properties of the owner. It is rather a public property which cannot be considered as common facilities. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
1. Refund claim of Service Tax for the purchase of an independent Villa
2. Applicability of exemption notification for refund claim
3. Definition of 'residential complex' under the law
4. Rejection of refund claim based on common facilities in a housing project

Analysis:

1. Refund claim of Service Tax for the purchase of an independent Villa:
The appellant filed a refund claim for Service Tax paid during the period for purchasing an independent Villa. The claim was made under a specific exemption provided in a notification. However, a show-cause notice was issued proposing to deny the refund claim, leading to the rejection of the claim by the Assistant Commissioner and subsequent appeal by the appellant.

2. Applicability of exemption notification for refund claim:
The Assistant Commissioner rejected the refund claim on the grounds that the project in question consisted of more than 12 Villas in a composite premise with common facilities, making it ineligible for the exemption. The Commissioner (Appeals) upheld this decision, leading to the present appeal before the Tribunal.

3. Definition of 'residential complex' under the law:
The appellant argued that the impugned order failed to properly appreciate the definition of a residential complex. The appellant contended that the project did not fall within the definition of a residential complex as per the law, highlighting separate contracts for land purchase and house construction, individual plan sanctioning, and charging of Service Tax for individual house construction.

4. Rejection of refund claim based on common facilities in a housing project:
The main issue revolved around the presence of common facilities like parks and roads in the housing project. The appellant argued that these facilities had been relinquished to the Government, making them public property and not common facilities of the owner. The Tribunal, after considering submissions from both parties and relevant legal precedents, found that the conditions for a complex to be considered a residential complex were not met in this case. The Tribunal also noted that the common facilities had been relinquished to the Government, thereby allowing the appeal and setting aside the impugned order. The judgment was delivered in favor of the appellant, granting consequential relief if applicable.