2023 (8) TMI 706 - AT - Service Tax

Rejection of Refund claim - refund application rejected on the ground that the receipt voucher indicates only the amount paid to the builder towards service tax but the ledger filed with the claim does not show any entry regarding the payment of service tax - Rule 4A of Service Tax Rules, 1994 - HELD THAT - As per the finding in Para 9 of the impugned Order-In-Appeal it is admitted that the document furnished by the appellant is sufficient to prove that appellant are ultimate purchaser of the apartments from the builder. Though the detail Final Order in JOSH P JOHN AND OTHERS 2014 (9) TMI 597 - CESTAT BANGALORE issued by this Tribunal in similar matter was not available before the Adjudication Authority at the time of issue of impugned Order-In-Original, appeal was considered by the learned Commissioner (Appeals) on 29.09.2015 and said order was available with Commissioner (Appeals). Thus Commissioner (Appeals) ought to have considered the guidelines issued by this Tribunal when considering the appeal filed by the appellant. Moreover one of the finding given by the Adjudication/Appellate Authority is that the refund application is premature on the ground that appellant is not barred by any law for time being in force from disposing the property and for that reason, appellant is not eligible for refund filed. Such finding is nothing but rejecting an eligible claim only on flimsy and vague ground. If the Adjudication Authority/Appellate Authority have reasons to believe that tax payers like appellant is not barred by disposing the property by law, service tax collected by them can be obtained, such finding is illegal and unsustainable. The appellant is eligible for refund of Rs.55.284/- erroneously collected from the appellant with interest. Appellant is also eligible to get interest 3 Months after filing the refund claim i.e. from 05.09.2009 - Appeal allowed.

Summary

Issues involved:
The issues involved in the judgment are the rejection of a refund claim of service tax paid by the appellant in the year 2008, based on lack of proper documentation and the application of the doctrine of unjust enrichment.

Issue 1: Rejection of refund claim based on lack of documentation

The appellant entered into an agreement for construction of a residential unit and paid service tax, which was later clarified to be applicable only to builders of residential complexes with more than 12 units upon completion of construction. The Adjudication Authority rejected the refund claim citing lack of proper documentation, specifically noting that the ledger did not show the payment of service tax. The claim was deemed premature and not eligible for refund due to the possibility of recouping the tax from subsequent buyers, invoking the doctrine of unjust enrichment.

Issue 2: Rejection of refund claim based on absence of builder's documents

The Commissioner (Appeals) rejected the appeal on the grounds that the builder, being a registered taxable service provider, was required to issue proper invoices or bills, which were not provided by the appellant. The appellant's eligibility for refund was further denied based on Rule 4A of Service Tax Rules, 1994, and the absence of any legal prohibition on selling the property.

Judgment Summary:

The appellant filed an appeal against the rejection of a refund claim for service tax paid in 2008. The appellant argued that the rejection was based on vague grounds and cited legal precedents emphasizing the importance of evidence in determining tax liability. The Tribunal considered previous cases and guidelines, noting that the evidence of bearing the service tax liability is crucial for refund eligibility. The Adjudication Authority's finding that the claim was premature due to potential recoupment from subsequent buyers was deemed unsustainable. The Tribunal found the appellant eligible for refund with interest, as the service tax had been erroneously collected and the appellant had provided sufficient evidence of being the ultimate purchaser of the property from the builder. The appeal was allowed with consequential relief, granting the refund of Rs.55,284 with interest from the date of filing the claim.

*(Order pronounced in the Open Court on 26. 07. 2023)*