2010 (4) TMI 174 - AT - Service Tax

Construction of residential complex- Notification No.18/2005-ST- The claim of the assessees for refund of Rs.1,89,121/- stated to be the amount of service tax paid in excess on the service of Construction of residential complex has been rejected on the ground that the assessees had not substantiated their stand on payment of excess tax and further on the ground of unjust enrichment. The Commissioner (Appeals) upheld the rejection of the claim for refund on the ground that the assessees had not produced documents such as invoices, TR-6 challans. Held that-matter is remand back for considering the worksheet and ST-3 return.

Summary

Issues:
Claim for refund of excess service tax paid on construction of residential complex rejected on grounds of non-substantiation and unjust enrichment.

Analysis:
The Appellate Tribunal, Chennai, presided over by Hon'ble Ms. Jyoti Balasundaram, Vice-President, addressed the issue of the assessees' claim for a refund of Rs.1,89,121, representing an alleged excess payment of service tax on the construction of a residential complex. The rejection of the refund claim was based on the failure of the assessees to substantiate their position on the excess tax payment and the concept of unjust enrichment. The Tribunal noted that while the show-cause notice raised concerns about the availability of abatement under Notification No.18/2005-ST and the limitation period for certain claims, the adjudicating authority acknowledged the assessees' eligibility for the abatement but rejected the claim due to lack of evidence regarding the excess tax payment and unjust enrichment.

The Commissioner (Appeals) upheld the rejection of the refund claim, emphasizing the absence of essential documents such as invoices, TR-6 challans, and agreements with flat buyers detailing the land cost forming part of the exempted value. In response, the Tribunal agreed with the assessees' argument that invoices are not issued for the sale of residential flats and that the cost of land is irrelevant for determining excess tax payment. The focus should be on the amount paid by flat buyers, with service tax applicable to 33% of that amount as per the abatement provision of Notification No.18/2005. The assessees submitted ST-3 returns, revised returns, and a worksheet outlining the tax payable, tax paid, and the alleged excess tax for the refund claim.

In the interest of justice, the Tribunal remitted the case to the adjudicating authority for a fresh examination. The authority was instructed to review the worksheet and ST-3 returns to determine if there was indeed an excess payment by the assessees. Subsequently, the assessees were directed to demonstrate that they did not pass on the duty incidence to their buyers. The Tribunal ordered fresh adjudication with a reasonable opportunity for the assessees to present their defense, ultimately allowing the appeal through remand. The judgment was dictated and pronounced by Vice-President Jyoti Balasundaram on 19-04-2010.