P.V. Subba Rao ORDER
Dilip Gupta, J. (President)
1. M/s. Quality Builders & Contractor1 has filed this Appeal to assail the order dated June 25, 2018 passed by the Commissioner (Appeals), Jodhpur, by which the order passed by the adjudicating authority on April 21, 2017 rejecting the refund claim of Rs. 21,33,490/- filed by the appellant has been upheld.
2. The period involved in this appeal is from 2015-16 and the issue is as to whether the appellant is entitled to claim refund of the service tax deposited by the appellant on construction of individual/independent residential houses and whether the refund is hit by the principles of unjust enrichment.
3. The appellant constructed individual/independent residential houses as per the work order given by the Rajasthan Housing Board2. The appellant has stated that the Resident Engineer of the Housing Board has given a certificate that the houses constructed as per the work orders issued by the Housing Board are independent residential houses having independent approach and entry with separate electricity and water connections. According to the appellant, service tax was deposited by the appellant on such constructed houses by mistake and even the Housing Board deposited 50% of the service tax under reverse charge mechanism. The appellant claimed refund of the service tax deposited by the appellant as also the Housing Board since the Housing Board had awarded the contract in favour of the appellant for a gross amount, inclusive of all taxes and 50% of the service tax paid by the Housing Board was deducted from the amount payable to the appellant by the Housing Board. The appellant further claims that construction of the individual/independent residential houses was not subject to levy of service tax prior to July 01, 2012 and even after July 01, 2012 it was exempted under the Exemption Notification dated June 20, 2012.
4. The Commissioner (Appeals) denied the refund of service tax paid for the reason that the appellant would not be entitled to claim benefit of the Exemption Notification dated June 20, 2012 for the period after July 01, 2012 and the relevant portion of the order is reproduced below:
"Thus, the entry no. 14(b) of said notification provides exemption to a single residential unit from levy of service tax. "Residential Complex" means any complex comprising of a building or buildings, having more than one single residential unit. Further, the said notification defines single residential unit as a self contained residential unit which is designed for use, wholly or principally for residential purposes for one family. Since an exemption notification would have to be strictly interpreted, it is clear, that construction of row houses, villas or individual houses, which form part of a gated community, have come under the service tax levy, with effect from 1-7-2012 given the fact that the new definition of "residential complex" is rather wide. The conditions related to approval of the layout, the need to have common area, etc. based on which, exemption could be claimed under the old law, are no longer relevant under the new law. Therefore, the decisions passed by considering the old law are also not applicable in the present scenario.
5.4. In view of the above work orders, the appellant has constructed more than one house for Rajasthan Housing Board in a particular area. However, they have not provided the details of the said houses whether they were horizontally or vertically. Moreover, the entry no. 14(b) is also not applicable for a single residential unit which is a part of a residential complex and as per the definition of 'residential complex' given in the said notification, it is any complex comprising of a building or buildings, having more than one single residential unit in any of the form such as horizontally or vertically as flats, row houses, villas. Therefore, a building is considered as a residential complex if it is having more than one single residential units either vertically or horizontal........