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TMI Blog2022 (9) TMI 217X X X X Extracts X X X X X X X X Extracts X X X X ..... RSUS COMMISSIONER OF CENTRAL EXCISE, INDORE [ 2012 (11) TMI 1000 - CESTAT, NEW DELHI] also observed that service tax can be demanded only if the building concerned has more than 12 residential units in the building and such levy will not apply in cases where one compound has many buildings, each having not more than 12 residential units. It is true that w.e.f July 01, 2012 construction of complex is a declared service, but the Exemption Notification exempts services by way of construction, erection, commissioning or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex have been exempted - the Commissioner (Appeals) was not justified in holding that the appellant would not be entitled to the benefit of the Exemption Notification. Principles of unjust enrichment - HELD THAT:- The Allahabad High Court in COMMISSIONER OF CUSTOMS CENTRAL EXCISE SERVICE TAX VERSUS M/S. INDIAN FARMERS FERTILIZERS COOPERATIVE LTD. [ 2014 (7) TMI 891 - ALLAHABAD HIGH COURT] held that a refund can be claimed by a person who has borne the incidence of tax. Even in accordance with the Exemption Notification dated June 20, 2012, 5 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was deducted from the amount payable to the appellant by the Housing Board. The appellant further claims that construction of the individual/independent residential houses was not subject to levy of service tax prior to July 01, 2012 and even after July 01, 2012 it was exempted under the Exemption Notification dated June 20, 2012. 4. The Commissioner (Appeals) denied the refund of service tax paid for the reason that the appellant would not be entitled to claim benefit of the Exemption Notification dated June 20, 2012 for the period after July 01, 2012 and the relevant portion of the order is reproduced below : Thus, the entry no. 14(b) of said notification provides exemption to a single residential unit from levy of service tax. Residential Complex means any complex comprising of a building or buildings, having more than one single residential unit. Further, the said notification defines single residential unit as a self contained residential unit which is designed for use, wholly or principally for residential purposes for one family. Since an exemption notification would have to be strictly interpreted, it is clear, that construction of row houses, villas or individual ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion he has placed reliance upon the judgment of the Allahabad High Court in Commissioner of Customs, Central Excise Service Tax vs Indian Farmers Fertilizers Coop. Ltd. [2014 (35) STR 492 (All.)] 7. Shri Ravi Kapoor, learned Authorized Representative appearing for the Department has, however, supported the impugned order and submitted that the appellant was not entitled to claim benefit of the Exemption Notification dated June 20, 2012. 8. The submissions advanced by learned Chartered Accountant appearing for the appellant and learned Authorized Representative appearing for the Department have been considered. 9. To appreciate the submissions, it would be useful to first examine the position regarding levy of service tax as it existed prior to July 01, 2012. 10. The appellant had constructed residential houses for the Housing Board. Section 65(105)(zzzh) of the Finance Act, 1994 [the Finance Act] provides that taxable service means any services provided or to be provided to any person, by any other person in relation to construction of complex . 11. Construction of complex has been defined in section 65(30a) of the Finance Act as follows : Section 65(30 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... twelve residential units. Independent buildings having twelve or less than twelve residential units would not be covered by the definition of residential complex 15. The contention of the appellant is that independent residential houses were built, each having a separate entry with separate electricity and water connection and a single building did not have more than twelve residential units. It is for this reason that the appellant contends that the houses constructed by it for the Rajasthan Housing Board will not be covered by the definition of a residential complex and, therefore, would not be taxable as the contract executed with the Housing Board was not in relation to construction of a complex. 16. This submission, for the reasons stated above, deserves to be accepted. In this connection reliance can be placed on a Division Bench judgment of the Tribunal in Macro Marvel Projects Ltd. v/s Commissioner of Service Tax, Chennai [2008 (12) STR 603 (Tri.-Chennai)] wherein the demand of service tax was for the period 16 June, 2005 to November, 2005 under construction of complex service under section 65(30a) of the Act. The Bench examined the scope of construction of com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r to July 01, 2012 and post July 01, 2012 and observed as follows : 6. Having considered the rival contentions and the admitted facts that the appellant have constructed individual units or row houses we find that it is evident from the aforementioned provisions both for the period prior to 1 July, 2012 and subsequent to that date, that construction of residential complex having not more than 12 residential units per building or block prior to 1 July, 2012 and two or more units after 1 July, 2012 is not sought to be taxed under the provisions of the Finance Act/Service Tax provisions . For the levy, it should be registered complex comprising more than 12 units prior to 1 July, 2012 and more than one residential unit in a complex from 1 July, 2012. Admittedly in the present case, the appellant constructed individual residential houses, each block, being a residential unit which is an admitted fact. In any case, it appears that the legislature did not want to tax construction of individual residential units to the levy of service tax. We find that the learned Commissioner have erred in considering the approved plan for construction of more than 12 individual units on a large plo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been affirmed by the Hon'ble Apex Court. (emphasis supplied) 21. It is true that w.e.f July 01, 2012 construction of complex is a declared service, but the Exemption Notification exempts services by way of construction, erection, commissioning or installation of original works pertaining to a single residential unit otherwise than as a part of a residential complex have been exempted. 22. In this view of the matter, the Commissioner (Appeals) was not justified in holding that the appellant would not be entitled to the benefit of the Exemption Notification. 23. The Commissioner (Appeals) was also not justified in holding that the refund was hit by the principles of unjust enrichment. As per the work orders, service tax was to be borne by the appellant and the Commissioner (Appeals) has also found, as a fact, that the contract awarded by the Housing Board to the appellant mentions that service tax shall be borne by the contractor. The Allahabad High Court in Indian Farmers Fertilizers Coop. Ltd. held that a refund can be claimed by a person who has borne the incidence of tax. Even in accordance with the Exemption Notification dated June 20, 2012, 50% of the tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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