CESTAT held that the appellant was liable to get the refund of the service tax amount and observed that the appellant cannot be liable to pay service tax as no service had been provided and the amount paid by them would not take the character of tax and the provisions of section 11B would thus not apply.
Brief Facts:
The appellant, engaged in construction service constructed a residential complex. Two customers booked their flats in the said project and entered into a duly registered sale agreement and paid part payment along with service tax. These bookings were cancelled and the customers asked for a refund of the service tax amount and the same was rejected by the department being time-barred given Section 11B of the Central Excise Act, 1944 and the appeal against the same was rejected by the Commissioner (Appeals).
Observations of the Court:
It was further stated that the amount had been paid by the customers and when they cancelled the booking they want to get a refund of their entire amount including the amount of service tax paid by them separately, which they are entitled to and since service tax is not backed by any authority of law, the department had no authority to retain the same. It was further stated that if there is no service then the question of paying any tax on it does not arise and the department can’t keep it with them as service tax once the buyer cancelled the booking and the consideration for service was returned, the service contract got terminated and once it is established that no service is provided, then a refund of tax for such service become admissible.
It was further stated that the appellant cannot be liable to pay service tax as no service had been provided and the amount paid by them would not take the character of tax and the provisions of section 11B would thus not apply.
The decision of the Court:
The appeal was allowed and it was held that the appellant is entitled to the refunds.
Case Title: Guardian Landmarks LLP vs. Commissioner of Central Excise & Service Tax
Coram: Hon’ble Mr. Ajay Sharma, Member (Judicial)
Case No.: Service Tax Appeal No. 88084 of 2019
Advocate for the Applicant: Mr. Viraj Reshamwala
Advocate for the Respondent: Mr. S.B. P. Sinha
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