Rare Townships Private Limited Vs Commissioner of CGST & Central Excise (CESTAT Mumbai)
In the case of Rare Townships Private Limited vs Commissioner of CGST & Central Excise, the CESTAT Mumbai overturned the rejection of a ₹15,30,978 refund claim related to works contract services from April to September 2015. The dispute arose over compliance with stamp duty requirements outlined in Notification No. 9/2016-ST, which reinstated the exemption withdrawn in 2015. The lower authorities had denied the refund, citing the appellant’s failure to provide evidence of stamp duty payment before 1st March 2015. However, Rare Townships argued that their activity was exempt from stamp duty, making this condition inapplicable. The Tribunal found that the requirement to furnish stamp duty evidence was solely for authenticating the contract date, not mandatory if stamp duty was exempt. Furthermore, the appellant had not passed the tax burden to the recipient, satisfying the conditions under Section 11B of the Central Excise Act. Concluding that the lower authorities had erred in rejecting the refund, CESTAT set aside the denial and granted the refund with consequential relief.
The matter was argued by Ld. Counsel Mahesh Raichandani
FULL TEXT OF THE CESTAT MUMBAI ORDER
This appeal lies against rejection of refund claim of ₹15,30,978/-paid for the period from 1st April 2015 to 30th September 2015 when, inter alia, ‘works contract service’ was made liable to tax by notification no. 06/2015-ST dated 1st March 2015 rendered exemption under notification 25/2012-ST dated 20th June 2012 came to be withdrawn by notification no. 06/2015-ST dated 1st March 2015 only for reinstatement, with retrospective effect, by notification no. 9/2016-ST dated 1st March 2016, for all services rendered in connection with construction, erection, installation and commissioning, etc for ‘local authority’ or government authority. Upon reinstatement of the exemption, special provision had been made in Finance Bill, 2016 for tax thus collected to be refunded subject to the condition that a contract had been entered into prior to 1st March 2015 and stamp duty paid prior to that. The refund claim was sought to be rejected on the ground that the evidence of compliance with the stamp duty requirement had not been furnished and that the said tax had not been recovered from the recipient of the service and the original authority, holding that the noted deficiencies had not been made good by the appellant, rejected the claim.
