Service tax refund denied where lease was not reclassified and notification conditions were not proven.

Refund of service tax was denied where the agreement was treated as a pure lease and not a sale-linked construction transaction eligible for abatement under Notification No. 26/2012-ST. The service recipient could not reclassify the provider's activity, as the provider had treated it as renting of immovable property and filed returns on that basis. The claim also failed because the appellants did not prove the statutory conditions relied on by the lower authorities, including non-availment of Cenvat credit, deposit of the tax collected, and inclusion of land value in the lease consideration. The rejection of refund was upheld.

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Issues: Whether the appellants were entitled to refund of service tax on the footing that the underlying transaction was construction service eligible for abatement under Notification No. 26/2012-ST, and whether the refund claim failed for want of proof that the service provider had not availed Cenvat credit, had deposited the tax collected, and that the land value was included in the lease consideration.

Analysis: The agreement was found to be a pure lease agreement and not part of any sale transaction. The receipts did not show any separate service tax particulars or service provider registration details. The service provider had treated the activity as renting of immovable property and had filed returns accordingly, and the recipient could not alter that classification for claiming refund. Independently, the appellants had not produced reliable evidence to establish the statutory conditions relied upon by the lower authorities under Notification No. 26/2012-ST, including non-availment of Cenvat credit, deposit of tax, and inclusion of land value in the consideration.

Conclusion: The refund claim was not sustainable and the appellants were not entitled to the relief sought.

Final Conclusion: The order of rejection of refund was upheld and all connected appeals failed.

Ratio Decidendi: A service recipient cannot displace the classification adopted by the service provider to claim refund, and refund under the exemption notification must be supported by proof of fulfillment of its statutory conditions.

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