Case Law Details
Pankaj Bagri S/O Shivkumar Bagri & Anr. Vs Union of India & Anr. (Gujarat High Court)
The Hon’ble High Court of Gujarat allowed the writ petition and directed demand to sanction refund with interest under section 11B of the Act.
The petitioner is an individual. It purchased an under construction flat in Mumbai from Adani Developers. The builder charged service tax to the petitioner. The petitioner filed refund claim for the said amount. Show cause notice was issued proposing rejection. Claim was rejected as well as appeal came to be rejected. On appeal, Hon’ble CESTAT allowed the appeal. The claim was then sanctioned with interest. For second instalment of payment, again refund claim was filed. Similar show cause notice was issued and similar rejection order. The Ld. Commissioner (appeals) remanded the matter back to follow earlier orders. Yet, rejection order came to be passed. The Ld. Commissioner (appeals) again remanded the matter. Third show cause notice came to be issued, on same grounds. The petitioner replied. However, an ex-parte rejection order was passed. Such order was challenged in writ petition.
The Hon’ble High Court of Gujarat allowed the writ petition and directed demand to sanction refund with interest under section 11B of the Act. It held: (i) the third show cause notice and order are passed in gross violation of judicial discipline as the lower authorities have to unreservedly follow the orders of the higher appellate authorities; (ii) despite alternate remedy of appeal, the writ can be maintained if the orders are passed with jurisdiction; (iii) the service recipient cannot be made to comply with the provisions required to be complied by the service provider, if any; (iv) the adjudicating authority had not considered any of the documents produced by the petitioner and passed the same order again; from the approach of the authorities it appears they were bent on rejecting the refund claims.
The Matter was Argued by Ld. Counsel Bharat Raichandani
FULL TEXT OF THE JUDGMENT/ORDER OF GUJARAT HIGH COURT
1. Heard learned advocate Bharat Raichandani with learned advocate Mr.Ritik Jain for learned advocate Mr.Anshul Jain for the petitioners and learned advocate Mr.C.B. Gupta in Special Civil Application No.969 of 2023 learned advocate Mr.Siddharth Dave in Special Civil Application No.973 of 2023, for the respondents.
1.1 Rule, returnable forthwith. Learned advocates for the respective respondents waives service of notice of Rule.
1.2 Having regard to the controversy in narrow compass and with the consent of learned advocates appearing for the respective parties, the matters are taken up for final consideration.
2. Both these petitions are arising from the similar facts and therefore, they were heard together and are being disposed of by this common judgment.
2.1 For the sake of convenience, Special Civil Application No.969 of 2023 is treated as a lead matter.
3. By this petition under Article 227 of the Constitution of India, the petitioners have prayed for the following reliefs.
(A) this Hon’ble Court be pleased to issue a writ of Certiorari or a writ in the nature of Certiorari under Article 226 of the Constitution of India, calling for the 3rd Order-in-Original No CGST/VI/Ref-19/ Pankaj Bagri/AC/DAP/2022-23 dated October 7, 2022 passed by Respondent No. 2, after going into the validity and legality thereof to quash and set aside the same (Exhibit-A);
(B) this Hon’ble Court be pleased to issue a writ of mandamus or any other appropriate writ, order or direction ordering and directing Respondent No.2 to forthwith sanction and grant the Petitioners refund of Rs. 4,10,782/- along with interest claimed vide refund application dated June 26, 2018 as the partial refund is already granted and the revenue cannot adopt a contrary stand. Further, the superior authorities have ordered in favour of the Petitioners.
4. The petitioners filed refund claim for service tax which was paid on purchase of under construction residential property viz. Flat No.1702, ‘C’ Wing, Western Heights, J.P. Road, Four Bungalows, Andheri (W), Mumbai – 400 053 by the petitioners of Special Civil Application No.969 of 2023, whereas Flat No.1703 of the same Wing by the petitioners of Special Civil Application No.973 of 2023.
4.1 The said under construction property was purchased from Adani Estates Pvt. Ltd., the developer and the service provider (hereinafter referred to as ‘the developer/service provider’).
4.2 The developer had charged and recovered service tax from the petitioners. The petitioners thereafter filed two refund claims since payments were made on two different occasions in view of the decision of the Delhi High Court in case of Suresh Kumar Bansal v. Union of India [2016 (6) TMI (192) Delhi], wherein it is held that in absence of proper valuation mechanism, service tax cannot be charged for the construction services provided by the developer.
4.3 The petitioners of Special Civil Application No.969 of 2023 filed refund claim of Rs.11,93,447/- on 04th October, 2016 being the first refund claim and second refund claim was filed for Rs.04,10,782/- on 26th June, 2018.
4.4 The petitioners of Special Civil Application No.973 of 2023 filed refund claim of Rs.11,97,871/- on 06th September, 2016 being the first refund claim and second refund claim was filed for Rs.04,12,309/- on 26th June, 2018.
4.5 The Assistant Commissioner of Service Tax issued show-cause notice dated 15th November, 2016 in case of petitioners of Special Civil Application No.969 of 2023, whereas in case of petitioners of Special Civil Application No.973 of 2023 the show-cause notice was issued on 25th October, 2014 on the similar ground as under.
– That the developer is providing amenities like car parking, common area to the claimant.
– There is no specific charge that is attributable to these amenities provided to the claimant.
– It is alleged that such charges represent a preferential value charge which is not possible to be bifurcated from the total
consideration charged by the developer to the claimant. As per the decision of the Hon. High Court, the exemption from Service Tax is not applicable on the preferential value charges. In absence of bifurcation, it is not possible to determine the value on which the service tax ought to be paid by the claimant.
– The claimant has failed to provide the following documents:
a) Form R for refund application;
b) Receipt of Service Tax of Rs. 11,93,447/ issued by Service Provider;
c) Relevant ST 3 Return under which the Service Provider has paid Service Tax; and
d) No objection certificate from the Service Provider.
– It has been further alleged that in absence of ST 3 Returns of the service provider, it cannot be ascertained whether they have taken Cenvat of input services which are used in taxable as well as exempted services or whether they have maintained separate account of Cenvat credit used in exempted services as well as taxable services
– Since the services provided by them become exempted as per the Hon. High Court decision, the service provider is required to reverse 6% amount of the exempted value of the service which has now become exempted.”
4.6 The petitioners filed written submissions enclosing relevant documents, however the Assistant Commissioner of Service Tax passed Order-in-Original dated 30th November, 2016 in both the petitions rejecting the first refund claim filed by the petitioners of both the petitions on the following grounds.
a) In absence of a bifurcation of a value pertaining to preferential location charge it is not possible to determine the quantum of refund of Service Tax
b) The Petitioners have failed to produce receipts / invoices issued by the developer
c)The Petitioners have failed to produce ‘No Objection Certificate’ from the developer
d) The decision of the Delhi High Court is applicable for the period prior to July 2012. Since, in the present case, the period is after 2012, the ratio of the aforesaid decision is not applicable.
4.7 Being aggrieved, the petitioners filed appeal before the Commissioner of Central Excise & Service Tax (Appeals) who, by order dated 10th January, 2018, rejected the appeals of petitioners of both the petitions on the following ground.
a) The decision of the Delhi High Court is applicable for the period prior to July 2012. Since, in the present case, the period is after 2012, the ratio of the aforesaid decision is not applicable.
b) No document evidencing that service tax has been paid by the Petitioners to the service provider and that service provider has deposited tax to the government exchequer. Only a letter dated 28/09/2016 issued by the developer showing the details of service tax payment has been submitted. The said letter does not show service tax registration number and details of services provided. Onus lies on the claimant to prove that duty has been credited to the government account.
4.8 Being aggrieved, the petitioners filed appeal before the Central Excise & Service Tax Appellate Tribunal (CESTAT). By common order dated 10th May, 2019 allowed the appeals of the petitioners of both the petitions with regard to first refund claim. The adjudicating authority passed order dated 28th November, 2019 granting first refund claim to the petitioners of both the petitions.
4.9 The petitioners took cognizance of the date of payment to the builder, filed second refund claim. The respondent-department issued identical show-cause notice and by Order-in-Original dated 28th September, 2018 rejected the refund claims filed by the petitioners. The petitioners, being aggrieved, preferred appeals before the Commissioner (Appeals) who, by order dated 30th September, 2020 in case of petitioners of Special Civil Application No.969 of 2023 and by order dated 13th October, 2020 in case of petitioners of Special Civil Application No.973 of 2023, ordered for de novo adjudication following the ratio of the decision of the CESTAT. Since both the refund claims pertain to the same property and since the first refund claim was already sanctioned by the department, the second refund claim was also allowed.
4.10 On remand, the respondent-department again issued second show-cause notice on 20th January, 2021 (hereinafter referred to as ‘the second show-cause notice’) on the following discrepancies to reject the refund claim.
– The period involved in the case of Shri Suresh Kumar Bansal is prior to 2010 (i.e. prior to the amendment made by the Finance Act, 2017 retrospectively). Since the period involved in the present case is June 2017, the aforesaid decision is not applicable.
– The department has filed SLP in the Supreme Court against the aforesaid High Court decision and hence the refund claim is inadmissible.
4.11 The petitioners filed reply highlighting that the very grounds are being raised which are against the principles of natural justice. However, the respondent, by Order-in-Original dated 17th February, 2021, rejected the second refund claim for second time.
4.12 The petitioners, therefore, again filed appeal before the Commissioner (Appeals) challenging the second Order-in-Original dated 17th February, 2021. The appellate authority again allowed the second refund claim rejecting all the grounds raised in Order-in-Original, by order dated 29th April, 2022.
4.13 Pursuant to the order passed by the appellate authority, petitioners filed letter dated 04th July, 2022 with a request that all the supporting documents to release the second refund claim at the earliest.
4.14 The respondent-department issued show- cause notice for the third time (hereinafter referred to as ‘the third show-cause notice’) dated 23rd August, 2022 on the following grounds.
– There is no infirmity in collection of service tax by the developer as the amount of consideration has been agreed mutually between the developer and the purchaser.
– As per amendment to Rule 2A of the Service tax (Determination of Value) Rules, 2006 made through the Finance Act, 2017, the developer has taken the consideration from the purchaser as per mutual agreement and hence the question of service tax refund does not arise.
– The period involved in the case of Shri Suresh Kumar Bansal was prior to 2010, hence the judgment is not applicable to the present case.
– The decision of Shri Suresh Kumar Bansal has not attained finality as the department has filed appeal against the same.
– From 1st July 2012, the service tax has been imposed on all services other than negative list and since the activity of construction prior to receipt of Occupation certificate is taxable.
– Documents evidencing payment of service tax have not been provided.
– No objection certificate from the developer along with a declaration that the developer will not claim the refund claim has not been provided.
– Declaration/Undertaking of erroneous refund has not been provided.
4.15 Thereafter the petitioners were called for personal hearing on 13th September, 2022 for hearing on third show-cause notice, which memo was received by the petitioners on 15th September, 2022. The petitioners, by letter dated 19th September, 2022, requested for adjournment of two weeks as the notice was received after the date fixed for personal hearing. Another personal hearing was granted on 29th September, 2022 without acceding to the request of the petitioners and the impugned third oil was passed ex parte rejecting the refund claim on 07th October, 2022 in both the cases on the ground of deciding the eligibility of the refund claim, calling for evidences like payment of service tax, no objection certificate from the builder along with the declaration from the builder that they shall not claim the refund of the said amount inspite of the fact that on the said grounds the appeals have already been allowed by the order of the CESTAT and two orders of the Commissioner (Appeals).
5. Learned advocate Mr.Raichandani for the petitioners submitted that the impugned Order-in-Original is challenged before this Court inspite of there being alternative efficacious remedy as the impugned order is passed without jurisdiction and contrary to the directions issued by the appellate authority though the refund claims have been decided by the CESTAT by order dated 10th May, 2019 allowing petitioners’ refund claim and Order-in-Original dated 28th November, 2019 granting first refund claim along with interest and Order-in-Appeal dated 30th September, 2020 allowing second refund claim and second Order-in-Appeal dated 29th April, 2022 allowing the second refund claim.
5.1 It was submitted that the aforesaid orders were not challenged by the department and the same have achieved finality and inspite of such fact, the department has issued the third show-cause notice on the basis of the same old grounds raising as new grounds with the sole object of denying the refund claim. It was, therefore, submitted that the third show-cause notice and the third oil are without jurisdiction and liable to be quashed and set aside. It was submitted that the petitioners are stuck in vicious circle of receiving notices one-after-another even after the matter has been decided by the appellate authority repeatedly and there is no remedy available to the petitioners since the department is issuing notices without challenging the orders passed by the appellate authority. It was submitted that once the appellate authority has decided the issue, then the adjudicating authority is bound by such decision and the second refund claim ought to have been granted by the respondent-department.
5.2 In support of his submissions, learned advocate for the petitioners relied on the decision in case of Commissioner of Income Tax v. Excel Industries Ltd. [2014 (309) E.L.T. 386 (S.C.)], wherein the Apex Court has held that revenue cannot be allowed to flip-flop on the issue and it ought let the matter rest rather than spend the tax payers’ money pursuing litigation for the sake of it. It was further submitted that once the issue has been decided and closed and accepted by the respondent, the same could not have been reopened under any guise or pretext as the facts and the legal position remains same and the rule of constructive res judicata would apply in the facts of the present case. It was submitted that the impugned orders seems to be mala fide attempt to re-adjudicate the decided issue which is not permissible in law.
5.3 Learned advocate for the petitioners referred to and relied upon the decision of the Apex Court in case of CCE, Kanpur v. Kothari Products Ltd. [2008 (229) E.L.T. 12 (S.C.)], Union of India v. Kamlakshi Finance Corporation Ltd. [1991 (55) E.L.T. 433 (S.C.)]. Reliance was also placed on sub-para IV of Para-2 of the Instructions issued by CBEC dated 11th March, 2015 which categorically mentions that “judicial discipline should be followed while deciding pending show cause notices / appeals.”. It was submitted that Circulars and Instructions issued by the CBEC are binding upon the respondent-department and they are required to be followed in view of the following decisions – (i) Paper Products Limited v. CCE [1999 (112) E.L.T. 765 (S.C.)], (ii) Collector of Central Excise, Vadodara v. Dhiren Chemical Industries [2002 (143) ELT 19 (SC)], (iii) CCE v. Usha Martin Ltd. [1997 (94) ELT 460 (SC)] and (iv) Darshan Boardlam Ltd. v. UOI [2013 (287) ELT 401 (Guj. HC)].
5.4 Reliance was also placed on the decision of Karnataka High Court in case of General Commodities Pvt. Ltd. v. Commissioner of Service Tax, Bangalore [2011 (23) STR 14 (Kar.)] wherein, in similar facts, second show-cause notice issued in violation of the final order passed by the Tribunal was quashed and set aside.
6. On the other hand, learned advocates for the respondents submitted that the Commissioner (Appeals) in order dated 30th September, 2020 specifically directed the petitioners to produce all the documents provided with the appeal papers, specially the certificate of the developer and other supporting documents to the adjudicating authority but the petitioners failed to submit relevant documents along with refund claim dated 04th July, 2022 and the builder/developer who was registered with the Central Excise & Service Tax would have take the service tax and generally who has paid the service tax would claim the refund of service tax in case it is subsequent found that service tax was paid inadvertently or in excess. It was, therefore, submitted that inspite of the service provider, service recipient has claimed refund and therefore, the matter was rightly remanded back by the Commissioner (Appeals), however the petitioner failed to submit no-objection certificate from the builder along with declaration from the builder that builder would not claim refund of the said amount etc. and therefore, the respondent – adjudicating authority No.2 was constrained to pass order dated 07th October, 2022.
6.1 It was submitted that the petitioners have alternative efficacious remedy to challenge such order by preferring appeal as the same is passed upon facts and the petitioner could not have preferred these petitions.
6.2 It was further submitted that the petitioners have been given opportunity of personal hearing, however the same was not availed and therefore, the petitioners cannot raise the issue of breach of principles of natural justice in the facts of the case.
6.3 It was submitted that as the refund claims are required to be adjudicated within the time-bound period as per the provisions of the Finance Act, 1994 and the Rules framed thereunder i.e. within three months from the date of filing of refund, and in absence of reply from the petitioner, for want of documentary evidence regarding payment of service tax, no-objection certificate from the builder/service provider along with declaration form from the builder/service provider that they shall not claim the refund of the said amount etc., it was not possible for the respondent No.2 to ascertain the correctness and eligibility of refund of tax. It was, therefore, submitted that no interference may be made in the impugned order passed by the respondent No.2 by relegating the petitioners to avail remedy of appeal before the appellate forum in the facts of the case.
7. Having heard learned advocates appearing for the respective parties and having considered the facts of the case, it is not in dispute that the third show-cause notice has been issued by the respondent No.2 on the same ground which has already been set aside by the order of the Tribunal and two orders of the Commissioner (Appeals). On perusal of the second show-cause notice and the third show-cause notice, there is no difference in the grounds for rejecting the second refund claim. The CESTAT in order dated 10th May, 2019 while considering the challenge in case of first refund claim while allowing the Service Tax Appeal No.11353 of 2018 and Service Tax Appeal No.11354 of 2018 held as under.
“4. Heard both the sides and perused the records. I find that the appellants are buyers of the flats. As per the documents submitted by them it clearly establish that for purchase of the flat the appellant have borne the service tax liability which was paid and collected by the service provider i.e. Builder. In this position the appellant are prima facie entitled for the refund. I fail to understand that why the department is insisting for all those documents which are not in possession and control of the appellant which belongs to the service provider. The refund can be processed on the documents submitted by the appellant. At the most appellant’s bank account statement can be verified whether the payment as claimed by them were made to the seller. As regard, the payment of service tax, the same can be verified through department channel that the service provider is also a registered assessee of service tax, the sanctioning authority can very well call for report from the Jurisdictional Service Tax Officers of the service provider. It is also observed that the refund was rejected also on the ground that the service provider might have taken the cenvat credit and in such case whether service provider has followed the Rule 6 of Cenvat Credit Rules 2004 in respect of exempted services provided by him. This observation of the lower authority is absolutely Irrelevant for the reason that as regard assessment of the service provider it is Jurisdictional Officer who should take care of any such non-compliance on the part of service provider, therefore, on that ground appellants refund, who are not concerned about the availment of cenvat credit and compliance of the Rule 6, therefore, on this ground refund could not have been rejected. As per my above discussion, I am of the view that the matter needs to be reconsidered by the original authority. Accordingly, I set aside the impugned orders and remand the matter to the adjudicating authority to reprocess the refund claim keeping in mind the above observation and pass a fresh order. Appeals are allowed by way of remand to the adjudicating authority.”
7.1 The first appellate authority while passing order dated 28th November, 2019 held as under.
“18. Accordingly, in view of the above judicial pronouncement as well as findings, I find that the said claimant had originally filed application of refund on 04.10.2016 and as per the provision of Section 11B, the same is required to be sanctioned within three months from the date of filing refund claim. Accordingly the said claimant is eligible for interest under Section 11BB of Central Excise Act, 19444. The interest @ 6% worked out and it comes to Rs.2,07,758/ as on 28.11.2019
19. The present refund claims is cleared from the pre-audit as reported by the Assistant Commissioner (Audit), Central GST, Ahmedabad South vide letter F. No IV/16-21/Pre-Post Audit-CGST/Div-VI/ 2018-19 dated 22.11.2019.
20. In view of the above discussion and following the judiciary discipline. I find that the said claimant is eligible for the refund claim of Rs. 11,93.447/-and accordingly 1. proceed to issue the following order-
::ORDER::
(i) I sanction the refund claim amounting to Rs. 11,93,447/-(Rupees Elevan Lakh Ninety Three Thousand Four Hundred Forty Seven only) as claimed by Shri Pankaj Kumar Bagri & Neha Bagri, 1702, C Wing, Western Heights, Four Bunglows, Andheri (West), Mumbai-400058 under Section 11B of Central Excise Act, 1944 as made applicable to Service Tax vide Section 83 of the Finance Act, 1994.
(ii) I also sanction interest amounting to Rs. 2,07,758/ in terms of Section 11BB of the Central Excise Act, 1944 to Shri Pankaj Kumar Bagri & Neha Bagri, 1702, C Wing, Western Heights. Four Bunglows. Andher (West), Mumbai-400058.”
7.2 The second refund claim of the petitioners was rejected by the Order-in-Original dated 28th September, 2018 on the same grounds which were raised while rejecting the first refund claim. The appellate authority by order dated 30th September, 2020 set aside the Order-in-Original and remanded the case to the adjudicating authority for considering the refund claim filed by the petitioners afresh following the principles of natural justice and the judgment of the CESTAT dated 28th November, 2019 in case of the petitioners while allowing the first refund claim. The respondent authority again rejected the second refund claim by Order-in-Original dated 17th February, 2021. The Commissioner (Appeals) in an appeal preferred by the petitioners vide order dated 29th November, 2022 for the second time quashed and set aside the Order-in-Original and remanded the matter again to the adjudicating authority to decide the matter in light of order dated 30th September, 2020 passed by the Commissioner (Appeals) in earlier round. In the third Order-in-Original the adjudicating authority again passed an ex parte order considering the same grounds as discrepancies which were considered by the CESTAT while sanctioning the first refund claim.
7.3 Thus, from the approach of the respondent authorities, it is apparent that on the same facts and in spite the first refund claim was granted by the respondent authority in view of the order passed by the CESTAT, second refund claim could not have been rejected and it ought to have been granted as the same arises in the same facts.
7.4 It is also apparent that the respondent authority while passing the impugned order dated 07th October, 2022 did not grant any opportunity of hearing to the petitioners and did not consider the orders passed by the CESTAT as well as two orders passed in appeals by the appellate authority. It would be therefore interesting to reproduce reasons recorded in the impugned Order-
in-Original by the respondent while rejecting the second refund claim of the petitioners.
“3. On verification of your refund claim, the following discrepancies have been noticed.:-
(a) Shri Pankaj Bagri & Neha Bagri purchased a residential property namely C/1702 at Western Heights, Four Bunglows, Andheri (W), Mumbai 400068 from the service provider and developer M/s. Adanı Estates Pvt. Ltd., Adani House, Near Mithakhali Circle, Navrangpura, Ahmedabad and paid the amount as mutuality decided by the seller & purchaser. In the circumstances, the builder has taken consideration from Shri Pankaj Bagri & Neha Bagrias decided mutually.
Therefore, there is no infirmity in collection of service at the point of time by the builder/service provider.
(b) As per amendment in Rule 2A of service tax (Determination of Value) Rules, 2006 made through the Finance Act, 2017, the builder has taken consideration from their buyer as decided mutually by them prior to BU permission and hence, service tax is correctly levied and collected & paid by the builder and there is no question of refund is arise.
(c) the period involved in the case of Shri Suresh Kumar Bansal is prior to 2010 (I.e. prior to the legislature amendment made by Finance Act, 2017 retrospectively). However, the period involved in the present case is June- 2017, therefore, the judgment of Hon’ble High Court of Delhi passed in the case of Suresh Kumar Bansal & Anuj Goyal & Others v/s. Union of India [2016 (6) TMI 192 Delhi High Court is quietly not applicable in the present case as the same has already been amended by the Parliament with retrospectively.
(d) The subject judgment has not attained finality as the appeal against the said judgment has been filed by the department (reported in 2016 (43) S.T.R. 3 (Del)) and admitted by the Hon’ble Supreme Court on 15.11.2016 and same is pending for decision (Union of India v. Suresh Kumar Bansal 2017(4) G.S.T.L.J 128(S.C.).
(e) from 1st July 2012, the Act has been amended and Service Tax was imposed on all services other than those specified in the negative list. Section 66B of the Act, the activity of “construction of complex or building” by builders (related to immovable property against the advance booking) is a declared service to the extent, provided or agreed to be provided, wholly or partly, while under construction, prior to COMPLETION and doesn’t fall under the negative list. Therefore same should be taxed by virtue of Section 66(E)
(b) read with section 65 B (22) and section 65(B)(44).
(f) Evidence documents regarding payments of the S. Tax from the builder are not provided.
(g) No objection certificate from the builder along with the declaration from the builder that they shall not claim the refund of the said amount are not provided.
(h) Declaration/Undertaking of erroneous refund is not provided.
From the facts available on record and documents submitted by the claimant it appears that the said claimant failed to comply with the provisions of Section 11B of the Central Excise Act, 1944 as made applicable to Service Tax matters vide Section 83 of the Finance Act, 1994 and rules framed there under and as such the refund claimed by the said claimant does not appear proper and admissible admissible.”
7.5 The respondent, while considering the above discrepancies, did not even consider the findings of the CESTAT or the findings arrived at by the appellate authority in two Order-in-Appeals referred to hereinabove, and again rejected the second refund claim for the third time on the same grounds.
8. It is trite law that the orders passed by the higher forum is binding upon the subordinate authorities. Once the CESTAT has held that the petitioners are entitled to refund and refund could not have been rejected on the ground that service provider might have taken the CENVAT Credit and in such case whether the service provider has followed Rule 6 of the CENVAT Rules, 2004 in respect of the exempted services provided by it. As such, verification has to be done by the jurisdictional officer for non-compliance on part of the service provider, if any, and the refund claim of the petitioners could not have been denied by respondent No.3. After considering the facts and the documentary evidence, first refund claim was allowed by the respondent authority. Therefore, the second refund claim could not have been rejected on the same grounds as the orders passed by the CESTAT as well as appellate authority are binding upon the adjudicating authority being the subordinate authority.
8.1 The respondent – adjudicating authority has also failed to consider letter dated 04th July, 2022 filed by the petitioner with the respondent giving all the details and the documents as required including the letter from the developer/service provider acknowledging the receipt of payment and service tax from the petitioners, statement of payments made to the developer, bank statement evidencing payments to the developer, TDS Challan for payments and declaration of the developer that the service tax refund claim has not been filed with any other service tax division.
8.2 The respondent authority has not taken into consideration any of the documents made available by the petitioners coupled with the fact that first refund claim has already been allowed after the CESTAT passed the order by the Assistant Commissioner, CGST Division-VI,
Ahmedabad South, vide order dated 28th November, 2019 as reproduced hereinabove.
9. In view of the foregoing reasons, the impugned orders are quashed and set aside. The respondents are directed to grant second refund claim i.e. Rs.04,10,782/- (Rupees Four Lakh Ten Thousand Seven Hundred Eighty Two Only) to the petitioners of Special Civil Application No.969 of 2023 and Rs.04,12,309/- (Rupees Four Lakh Twelve Thousand Three Hundred Nine Only) to the petitioners of Special Civil Application No.973 of 2023 in terms of order dated 28th November, 2019 passed by the adjudicating authority granting first refund claim along with statutory interest in terms of Section 11B of the Central Excise Act, 1944 as made applicable to the service tax vide Section 83 of the Finance Act, 1994. Both the petitions are accordingly allowed. Rule is made absolutely to the aforesaid extent. No order as to cost.
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