Tribunal grants service tax refund due to mistake of law, citing revenue deposit nature.

The Tribunal allowed the appeal, ruling that the appellant was entitled to a refund of the service tax deposited. The Tribunal held that the service tax paid under a mistake of law was akin to a revenue deposit, not subject to the limitation under Section 11B. Additionally, the doctrine of unjust enrichment was found inapplicable as the appellant bore the tax burden. The Adjudicating Authority was directed to grant the refund within 60 days along with interest under Section 11BB.

---

---

Issues:
1. Entitlement to refund of service tax deposited under "Construction of Residential Complex Service".

Analysis:
The appellant filed a claim for refund of service tax amounting to Rs.11,42,999 paid on services provided under "Works Contract Services" during April 2007 to September 2008. The claim was rejected by the Assistant Commissioner, Service Tax Division, Jaipur, and the appeal was dismissed by the Commissioner (Appeals) on grounds of discrepancies and unjust enrichment. The appellant argued that they constructed single independent residential units, which, as per a CESTAT order, do not qualify as a residential complex. The Commissioner (Appeals) cited a Supreme Court judgment and allowed the appeal, holding that no service tax was leviable on the construction of houses/duplexes by the appellant.

The Commissioner (Appeals) found that out of the claimed refund amount, Rs.3,99,607 deposited beyond the one-year limitation period was time-barred. However, the remaining amount of Rs.7,43,392 was deemed refundable subject to unjust enrichment. The issue of unjust enrichment was examined concerning the construction of houses for the Rajasthan Housing Board (RHB). The RHB clarified that any taxes levied by the government would be borne by the contractor. The Commissioner (Appeals) noted that the tax amount was booked as an expenditure in the appellant's Profit and Loss Account, indicating the passing of the tax burden to customers.

The appellant contended that the tax amount deposited under wrong advice was akin to revenue deposit, not subject to the limitation under Section 11B. They argued that unjust enrichment did not apply as the RHB had not paid any service tax to the contractor. The appellant's counsel relied on a Tribunal ruling in a similar case, where the limitation under Section 11B was deemed inapplicable, and the appellant was entitled to a refund. The Tribunal's order was upheld by the High Court in a related case.

Considering the arguments, the Tribunal held that the service tax paid under a mistake of law or wrong advice was akin to a revenue deposit, not subject to the limitation under Section 11B. The doctrine of unjust enrichment was deemed inapplicable as the appellant had paid the tax from their own pocket. Consequently, the Tribunal allowed the appeal, directing the Adjudicating Authority to grant the refund within 60 days along with interest under Section 11BB.

In conclusion, the Tribunal allowed the appeal, holding that the appellant was entitled to a refund of the service tax deposited.

---