2021 (11) TMI 17 - AT - Service Tax

Jurisdiction - revisionary powers of Commissioner under section 84 of the Finance Act, 1994 - If the Commissioner at the time of passing the order had enjoyed the Revisionary powers or not? - HELD THAT - Section 84 of Finance Act was substituted on 19.08.2009. The powers of Commissioner for Revision of orders was done away at the effect from 19.08.2009. Tribunal in the case of has held that no Order in Revision can be passed. In the instant case powers of Revision has been exercised on 06/12/2010 whereas the power of revision under section 84 was withdrawn from 19.08.2009. Appeal allowed - decided in favor of appellant.

Summary

Issues involved:
- Revision of order by Commissioner under section 84 of the Finance Act, 1994
- Applicability of service tax on construction of residential complex
- Interpretation of circulars clarifying scope of services
- Jurisdictional error in making revision of order
- Role of appellant as a Developer in construction activities

Revision of order by Commissioner under section 84 of the Finance Act, 1994:
The appeal pertained to a revision order passed by the Commissioner of Central Excise, Customs, and Service Tax, Vadodara under section 84 of the Finance Act, 1994. The Commissioner set aside the order of the Assistant Commissioner, leading to an appeal by the aggrieved party before the Tribunal. The crucial issue revolved around whether the Commissioner had the authority to exercise revisionary powers at the time of passing the order.

Applicability of service tax on construction of residential complex:
The appellant, a partnership firm engaged in construction and development activities, was subjected to service tax on the construction of a residential complex. The appellant had obtained service tax registration and paid the due amount. However, a subsequent circular clarified the applicability of service tax on real estate developers, prompting the appellant to file a refund claim. The Assistant Commissioner initially sanctioned the refund claim, but the Commissioner revised this decision, leading to the appeal.

Interpretation of circulars clarifying scope of services:
The appellant's counsel argued that the Commissioner's decision was not aligned with relevant circulars, including circular no. 332/35/2006-TRU and circular no. 108/2009 ST. The appellant contended that as a Developer engaging contractors for construction, they should not be liable to pay service tax on the residential complex.

Jurisdictional error in making revision of order:
The appellant's counsel highlighted an error in the Commissioner's exercise of revision powers post the withdrawal of such powers under section 84 of the Finance Act, 1994. Citing precedents and decisions, the counsel argued that the Commissioner lacked jurisdiction to revise the order after the specified date, rendering the impugned order unsustainable.

Role of appellant as a Developer in construction activities:
The appellant's counsel presented detailed agreements and contracts to establish the appellant's role as a Developer in the construction of the residential complex. Emphasizing the engagement of contractors for construction activities, the counsel contended that the appellant's position did not warrant liability for service tax, referencing specific circulars to support this argument.

In the final judgment, the Tribunal held that the Commissioner's exercise of revisionary powers post the withdrawal of such powers was invalid. Citing precedents, the Tribunal concluded that the impugned order could not be sustained and, therefore, set it aside, allowing the appeal in favor of the appellant.