Pramukh Realty Vs C.C.E. & S.T.-Daman (CESTAT Ahmedabad)
The brief facts of the case are that the appellant have pad service tax on Construction of residential Complex for which they have entered into the agreement for sale of flats, accordingly they have paid service tax on sale of flats. Subsequently the sale of flats has been cancelled and the appellant have returned the amount collected from the clients along with service tax. Thereafter the appellant have filed a refund claim for the service tax paid on such value of services which was refunded to the customers. The adjudicating authority has sanctioned the refund on merit as well as on limitation. The Revenue being aggrieved by the order in original filed an appeal before Learned Commissioner (Appeal). The Learned Commissioner (Appeals) has rejected the appeal only on the ground of time bar which shows that the issue of refund on merit attained finality. Now the only issue to be decided by me is whether the refund is time bar or otherwise.
In the facts of the present case the appellant have paid service tax even though the service was not completed and subsequently when the sale agreement was cancelled the appellant have returned the value of flat along with service tax to their customers. In my considered view the date of finalization i.e. Cancellation of sale of flat and refund of amount should be taken as a relevant date for computing the limitation under Section 11B .
From the above provision of clause (eb) of section 11B(B) it is clear that in the case where the service tax payment need to be adjusted at a later stage. The date of adjustment has to be reckoned for the purpose of computing limitation.
In the present case the fund has arisen from cancellation of the sale of flats and refund of amount to the customers. In my view this stage should be considered as adjustment of service tax hence, the one year period should be computed from the date of refund of amount made to their customers against cancellation of sale of flats.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The brief facts of the case are that the appellant have pad service tax on Construction of residential Complex for which they have entered into the agreement for sale of flats, accordingly they have paid service tax on sale of flats. Subsequently the sale of flats has been cancelled and the appellant have returned the amount collected from the clients along with service tax. Thereafter the appellant have filed a refund claim for the service tax paid on such value of services which was refunded to the customers. The adjudicating authority has sanctioned the refund on merit as well as on limitation. The Revenue being aggrieved by the order in original filed an appeal before Learned Commissioner (Appeal). The Learned Commissioner (Appeals) has rejected the appeal only on the ground of time bar which shows that the issue of refund on merit attained finality. Now the only issue to be decided by me is whether the refund is time bar or otherwise.
2. Shri Kaushik Nahar, Learned Company Secretary appearing on behalf of the appellant submit that since the service tax payment stands finalized only when the customer has decided to terminate the sale of the flat and accordingly, the total value of flat along with service tax collected from the customers has been refunded that should be taken as relevant date in terms of Clause (eb) of Section 11B. Therefore, from the date of refund of amount to the customer the appellant have filed refund claim well within the period of one year. He also placed reliance on the tribunal judgment in the case of M/s Ramesh Kumar Agarwal vide final Order No. 51646/2021 dated 25.06.2021.
3. Shri Ghanshyam Soni, Learned Joint Commissioner (AR) appearing on the behalf of revenue reiterates the finding of the impugned order. He further submits that there is no exception provided under Section 11B as regard time limit of one year it should be reckoned from the date of payment of service tax. Accordingly, since the refund was filed after one year from the date of payment of service tax the same become time bar. Hence the commissioner (appeals) has rightly denied the refund on limitation. He also placed reliance on the following judgments:
