AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (10) TMI 1350
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....nstruction of government buildings. Sub-section (1) provides that notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from 01.04.2015 and ending on 29.02.2016 (both days inclusive) in respect of taxable services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, renovation and alteration in respect of certain structures under a contract entered into before 01.03.2015 and on which appropriate stamp duty was paid before that date. Sub-section (2) of section 102 provides that refund shall be made of all such service tax which has been collected but which would not have been so collected had subsection (1) been in force at all the material times. It will be appropriate to reproduce section 102 of the Finance Act and it is as follows: "SECTION 102. Special provision for exemption in certain cases relating to construction of Government buildings. (1) Notwithstanding anything contained in section 66B, no service tax shall be levied or collected during the period commencing from the 1st day of April, 2015 and ending ....
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....rvice Tax Appeal No. 51384 of 2018 out of the five tenders, refund in three applications has been granted but because of unjust enrichment to the appellant, the amount has been directed to be credited to the Consumer Welfare Fund. In respect of two tenders, refund has been rejected because the contract was entered into after 01.03.2015. 7. In Service Tax Appeal No. 51386 of 2018 refund has been sanctioned in respect of four tenders but the amount has been directed to be deposited in the Consumer Welfare Fund because of unjust enrichment. In respect of one tender, the refund has been rejected because the date of Work Order is after 01.03.2015. 8. Ms. Suchi Sethi, learned consultant for the appellant made the following submissions: (i) The appellant had filed the refund applications on the instructions of MES with a clear stipulation that in case the refund is granted, the amount will be paid by the appellant to MES at the earliest. In such circumstances, the applications should be treated to have been filed by MES and the theory of unjust enrichment could not have been applied by treating the appellant as the beneficiary of the refund. To support this contention, lear....
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....hat the amount of service tax deposited by the appellant was reimbursed by the MES. Such being the position, it cannot be doubted that the liability of service tax was borne by the MES which was, therefore, the person that should have filed the refund applications under section 102 of the Finance Act. However, what transpires from the records is that it instructed the appellant to file the refund applications with a condition that if the refund was sanctioned, the appellant shall pay the amount immediately to the MES. 12. The issue, therefore, that arises for consideration is whether the Commissioner (Appeals) was justified in holding that as the appellant had already been reimbursed the service tax, any refund of service tax would result in undue unjust enrichment to the appellant. 13. This issue was examined at length by the Gujarat High Court in Ranjeet Singh Choudhary and it was observed: 17. The respondent No. 4 was also not correct in his approach while dealing with the petitioner's refund application. In the communication dated 7th November, 2016, the petitioner had made it abundantly clear that the service tax refund is being claimed for and on behalf of ....
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....ple interest @ 7.5 % per annum commencing from after three months of the completion of the execution of the contract till actual payment. It is further directed that the CPWD shall not seek any recovery from the petitioner in respect of service tax component from the petitioner's bills of other contracts." 14. It clearly transpires from the aforesaid decision of the Gujarat High Court that the order directing the amount to be deposited in the Consumer Welfare Fund because of unjust enrichment was set aside without disturbing the finding regarding the allowability of the refund claim. However, the matter was remitted to the adjudicating authority to permit the CPWD to join in the said application as a co-applicant and the application was directed to be decided on merits. The High Court also directed that the CPWD alone could pursue the refund claim and not the Writ Petitioner who was contractor. 15. Learned counsel for the appellant has, however, placed a decision of a learned Member of the Tribunal in Khanna Construction that holds that section 11B(2) of the Central Excise Act, 1944 will not be applicable as the amount was merely a deposit and not duty as such. 16. It is n....
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....ble services provided to the Government, a local authority or a governmental authority under a contract entered into before 01.03.2015. 23. The contention of the learned counsel for the appellant is that the tender had been finalized in favour of the appellant much prior to 01.03.2015 and mere issuance of the Work Order on a date subsequent to 01.03.2015 would not mean that the contract was entered into after 01.03.2015. In this connection learned counsel placed the tender summary reports of the MES and a decision of the Ahmadabad Bench of the Tribunal in Shanti Construction, which was subsequently followed by the Tribunal in Rasam Engineering. 24. Learned authorized representative appearing for the department, however, submitted that the Work Orders specifically mention that the tender of the appellant was being accepted and, therefore, it cannot be urged by the appellant that the tender was accepted on any date prior to date of the Work Orders. In support of this contention, the learned authorized representative placed reliance upon a decision of the Tribunal in P. Natesan. 25. The submissions advanced by the learned counsel for the appellant and the learned authorized r....
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....tioned. Under such circumstances, it cannot be urged that the tender was accepted on any date prior to 14.03.2015. To take the benefit of section 102(1) of the Finance Act, the contract should have been awarded prior to 01.03.2015 but in the present case the contract awarded on 14.03.2015. 29. Similar is the position with respect to the other two work orders. 30. This is what was held by the Tribunal in P. Natesan and the relevant findings contained in paragraphs 7 and 8 are reproduced below:- "7. The point that has to be analyzed is whether the appellant is eligible for refund on the basis of date of receiving the tender by the Government (Military Engineer Services). Undisputedly, the contract has been entered and signed on 19-3-2015. A contract comes into effect and binds the parties only when it is accepted. As per Section 2(b) of Indian Contract Act, 1872, acceptance is defined as "when the person to whom the proposal has been made signifies his assent thereto, the offer is accepted". Thus acceptance refers to the act of one party agreeing to the terms of proposed by another party. Merely receiving a tender or opening a tender cannot be considered as acceptance.....