Service Tax
TRT-2025-
Cestat Mumbai
Date:-05-01-23
In:-
Issue Favourable to Tax Payer ?:-
Order Date – 05 January 2023
Parties: Credence Property Developers Pvt. Ltd. Vs Commissioner of CGST & Central Excise
Facts –
- The Appellant, Credence Property Developers Pvt. Ltd. is engaged in providing Construction of Residential Complex Service. They had filed two refund claims under Section 11B of the Central Excise Act seeking refund of Service Tax paid in respect of two flats but were later cancelled by the buyer.
- The appellant had filed the refund claim for the cancelled booking and the same was rejected on the ground that the question of refund of service tax does not arise as the appellant has not paid any excess service tax but has paid only that much which they were liable to pay for consideration received by them on the invoice issued and in such a situation there is no provision for refund of service tax.
Issue –
- Whether the refund allowed on cancellation of flat booking?
Order –
- The Tribunal held that the cancellation of booking coupled with the fact of refunding the booking amount along with service tax paid would mean as if no booking was made and if that is so, then there was no service at all.
- It was also held that if there is no service then question of paying any tax on it does not arise and the department can’t keep it with them. No law authorises the department to keep it as tax.
- 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. Therefore, the authorities below were not justified in invoking the Provisions of Point of Taxation Rules, 2011 for denying the refund.
- Hence the Appellant is entitled for refund and the appeal is accordingly allowed.
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