2023 (1) TMI 252

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....und of Service Tax amount which the builder has returned/refunded to the buyer alongwith the advance amount paid, upon the cancellation of the two flats booked by the said buyer? 3. The facts of the matter in brief are as follows. The appellant is engaged in providing Construction of Residential Complex Service. They had filed two refund claims under Section 11B of the Central Excise Act read with Section 83, Finance Act, 1994 amounting to Rs.1,09,367/- and Rs.55,123/- respectively seeking refund of Service Tax paid in respect of two flats in Project Central Park which were booked by a buyer M/s. Symbio Generics, but were later cancelled by the said buyer. Upon cancellation, the appellant refunded advance amount paid by the buyer alongwi....

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....able under the said statute. But for that purpose there has to have some 'service'. Unless service is there no service tax can be imposed. For the applicability of the provisions as referred to in the deficiency memo or in the Adjudication order or appellate order, the pre-condition is 'service'. If any service has been provided which is taxable as specified in the Finance Act, 1994 as amended from time to time then certainly the assessee is liable to pay, but when no such service has been provided then the assessee cannot be saddled with any such tax and in that case the amount deposited by the assessee with the exchequer will be considered as merely a 'deposit' and keeping of the said amount by the department is violative of Article 265 o....

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....service has been returned. 6. As per Rule 66E(b), Service Tax Rules, 1994 in construction service, service tax is required to be paid on amount received from buyers towards booking of flat before the issuance of completion certificate by the competent authority and the booking can be cancelled by the buyer any time before taking possession of the flat. 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. The authorities below are not correct in their view that mere cancellation of booking of flats does not mean that there was no service. If the booking is cancell....