Case Law Details
Credence Property Developers Pvt. Ltd. Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
As per Rule 66E(b), Service Tax Rules, 1994 in construction service, service tax is required to be paid on amount received from buyers towards booking of flat before the issuance of completion certificate by the competent authority and the booking can be cancelled by the buyer any time before taking possession of the flat. Once the buyer cancelled the booking and the consideration for service was returned, the service contract got terminated and once it is established the no service is provided, then refund of tax for such service become admissible. The authorities below are not correct in their view that mere cancellation of booking of flats does not mean that there was no service. If the booking is cancelled and the money is returned to that buyer then where is the question of any service? Once it has been held that there is no service then by any stretch ‘Point of Taxation Rules, 2011’ can’t be roped in as for the applicability of the said Rules firstly providing of any ‘service’ by the Appellant has to be established. Therefore, the authorities below were not justified in invoking the Provisions of Point of Taxation Rules, 2011 for denying the refund.
FULL TEXT OF THE CESTAT MUMBAI ORDER
This appeal has been filed assailing the order dated 28.2.2020 passed by the Commissioner (Appeals-III), GST&CX, Mumbai by which the learned Commissioner rejected the appeal filed by the appellant.
2. The issue involved herein is about the refund of Service Tax amount which the builder has returned/refunded to the buyer alongwith the advance amount paid, upon the cancellation of the two flats booked by the said buyer?
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