TaxTMI 
TaxTMI 
2026 (1) TMI 1075
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....nt and its subsequent reconstruction, laying of rigid overlay, resurfacing of flexible pavment, construction of RCC duct, and cable duct, construction, and relaying of bituminous road. According to the appellant, they did not pay service tax on the said services in view of the exemption under Sl. No. 12(a) of Notification No. 25/2012-ST dated 20.06.2012, however, with effect from 01.04.2015, the said entry was omitted Vide Notification No. 06/2015-ST dated 01.03.2015. Consequently, the appellant paid service tax of Rs.3,60,15,853/- for the period during April, 2015 to February, 2016. Out of the said amount Rs.3,40,58,797/- has been reimbursed by the service recipient and the remaining amount of Rs.19,57,056/- was borne by the appellant. Subsequently, Notification No. 9/2016- ST dated 01.03.2016 reintroduced the exemption in respect of contracts that were entered prior to 01.03.2015 under Sl.No.12A. With the introduction of Section 102 and 103 in the Act, the exemption which was withdrawn was restored retrospectively and allowing the refund of the service tax paid during the period between 1.04.2015 to 29.02.2016. In terms thereof, the appellant filed the refund claim on 02.11.2016.....
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....llected from the service provider as the appellant has deposited the service tax with the Government. VII. Application for the refund has to be made within six months from the date the Finance Bill receives the assent of the President. The Finance Bill of 2016 received the assent of President on 14.05.2016. The refund claim was filed by the appellant on 02.11.2016. VIII. So far as the applicability of Section 103 is concerned, the learned Counsel submitted that the services pertained to construction of 'original work' in respect of Air Force Station, Naia. The principle of unjust enrichment prescribed under Section 11B of Central Excise Act do not apply in the case of refund claimed under the special provisions of Section 102 and 103 of the Act. The provisions of Section 11B are not applicable to the deposits. The amount paid by the appellant, which is being sought as refund, is not in the nature of service tax in the absence of liability to pay such tax. 6. Ms. Jayakumari, the learned Authorised Representative for the Revenue reiterated the findings of the authorities below and submitted that the appellant failed to comply with the mandatory ....
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.... to the Air Force Station, MES even prior to 01.04.2015 and no service tax was paid in view of the exemption under the existing Entry 12(a) of the Exemption Notification No.25/2012 dated 20.06.2012. The Department never raised any objection to the applicability of the said exemption on the services rendered by the appellant. The exemption under Sl No. 12(a) was omitted w.e.f. 01.04.2015 vide Notification No. 6/2015 dated 01.03.2015 and as a result the appellant paid the service tax. The exemption was reintroduced under Sl No. 12A of Notification No. 9/2016 dated 01.03.2016. To examine whether the services rendered by the appellant with the introduction of Sl. No.12 A would still be entitled to exemption, we need to refer serial numbers 12(a) and 12A of the two notifications:- Notification No. 25/2012 Notification No. 9/2016 "12. Services provided to the Government, a local authority or a governmental authority by way of construction, erection, commissioning, installation, completion, fitting out, repair, maintenance, renovation, or alteration of- (a) a civil structure or any other original works meant predominantly for use other than for commerce, industry, or any....
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.... predominantly for use other than for commerce, industry or any other business or profession; ii. a structure meant predominantly for use as- (i) an educational establishment; (ii) a clinical establishment; or (iii) an art or cultural establishment; iii. a residential complex predominantly meant for self-use or for the use of their employees or other persons specified in Explanation 1 to clause (44) of section 65B of the said Act, under a contract entered into before the 1st day of March, 2015 and on which appropriate stamp duty, where applicable, had been paid before that date. (2) Refund shall be made of all such service tax which has been collected but which would not have been so collected had sub-section (1) been in force at all the material times. (3) Notwithstanding anything contained in this Chapter, an application for the claim of refund of service tax shall be made within a period of six months from the date on which the Finance Act, 2016 receives the assent of the President." "103. Special provision for exemption in certain cases relating to construction of airport or port (1) Notwithstandin....
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....es/services which are: i. Survey of existing runway; ii. Constriction of office, labour camp and shed; iii. Material testing iv. Employment of necessary staff, v. Mobilization of equipment and material, vi. Demolition of concrete and flexible pavement which is to be constructed, vii. Construction of water storage tanks; viii. Application of rigid overlay (laying of new layer of rigid material) ix. Resurfacing of flexible pavement of main runway (laying of new layer of asphalt on the runway); x. Construction of ducts and drains; xi. Removal and refixing of lights, xii. Construction of bituminous roads and relaying of bituminous roads (complete removal of old, damaged top laver and replacing with a new, high qualify bituminous material); 3. The next issue requiring resolution is the types of activities that can be called as "construction of road" as against the activities which should fall under the category of maintenance or repair of roads. In this regard the technical literature on the subject indicate that the activities can be categorized as follows, - (A....
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....oads, runways, bridges etc. The learned Counsel has also referred to the definition of the term 'Civil Engineering', as given in Cambridge Dictionary, which is defined as the work of designing, building and repairing large public structures, such as roads, bridges, water systems and airports. Similarly, reliance has been placed on the definition of 'Civil Engineering' as given in Collins Dictionary that 'civil engineering' is the planning, design and building of roads, bridges, harbour, and public buildings. To further strengthen the argument, Ms. Shagun Arora, Advocate has placed reliance on the Standard Handbook for Civil Engineers, Chapter 18 titled as 'Airport Engineering' which involves design and construction of a wide variety of facilities for the landing, takeoff, movement on the ground and parking of aeroplanes, maintenance and repair of aeroplanes, fuel storage, and handling of passengers, baggage, and freight. Thus at an airport there are terminal buildings and hangers, pavements for aeroplane, runways, taxiways and aprons, roads, bridges, and tunnels for automobiles and walks for pedestrians etc. Reference has also been invited to the work description of Civil Engineeri....
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....stry of the Government of India and has to be given due weightage and it would not be appropriate for the Revenue which is another limb of the Government of India to ignore the same. MES being under Ministry of Defence is the service recipient and executed the work orders and are, therefore, competent to clarify the nature of work. In view thereof, we find force in the submissions of the appellant that the work undertaken would fall in the category of 'original work'. The services being rendered to MES, a Department of Ministry of Defence which is responsible for the security and safety of the nation, the requirement under Section 102(a) that services are meant predominantly for use other than for commerce, industry, or any other business or profession is satisfied. The Division Bench of the Tribunal in National Refrigeration and Air Conditioning Engineering versus CCE, Ludhiana [2011(23)S.T.R. 247(Tri. Del.)] has observed that as MES (a Department of Ministry of Defence) is not involved in any commercial activity, therefore, any service rendered to them is not taxable. The decision has been followed by the learned Single Member in Khanna Constructions versus Commissioner of CUS, C....
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.... was categorically observed that the Adjudicating Authority has missed the term "wherever applicable" while denying the refund of this amount on the ground that there is no evidence of payment of stamp duty on the contract. Further, Chief Engineer, (Air Force) MES in their letter dated 20.02.2017 on the basis of the office letter No. 88176/636/E8 dated December 20, 2016 clarified that government was not required to pay any stamp duty on the instrument executed by or on behalf of or in favour of the Government in terms of Section 3 of the Indian Stamp Act, 1899. The issue is crystal clear that under Section 102 stamp duty is chargeable only wherever applicable and since in the present case the agreement has been executed by the Government of India, no stamp duty is leviable in view of express bar in Section 3 of the Stamp Act. 16. The distinguishing features in the applicability of Section 103 is that services are provided pertaining to an airport or port and subject to the condition that Ministry of Civil Aviation or, as the case may be, the Ministry of Shipping in the Government of India, certifies that the contract has been entered into before the Ist day of March, 2015. There....
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.... Government of India. If the option was between the two ministries there was no reason to add the words, "as the case may be" rather the purpose would have been sorted by merely adding the word 'or'. The legislature very well had in mind that apart from these two ministries there could be other Ministry responsible for certifying the execution of the agreement. 17. The decision relied on by the Revenue in Essar Bulk Terminal Salaya Ltd versus Union of India (affirmed by the Apex Court) the Gujarat High Court was actually dealing with the vires of Section 103(3) which prescribes the period of limitation of 6 months for making the refund claim, on the ground that it is discriminatory in view of the limitation period of one year provided under Section 11B of Central Excise Act, 1944. Similarly, the decision of Bombay High Court in JSW Dharmatar dealt with the issue of limitation under Section 103(3). Here the limitation for filing the refund claim is not in issue and hence these decisions are of no relevance. 18. The learned Authorised Representative for the Department has opposed the refund claim on the ground that ST-3 returns filed by the appellant have not been modified befo....
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.... in Section 11B(2) of CEA will also not be applicable for the reason that in the refund claim, the appellant had categorically prayed that the amount of Rs.3,40,58,797/- be refunded directly to the account of the service recipient who have reimbursed the said amount to the appellant. In this regard, the learned Counsel has placed on record the communication dated October 17, 2016 issued by MES to All Command, CES suggesting the modalities to be followed for refund of service tax from the contractors, to the effect that the contractor will process refund cases to the Service Tax Department. While processing refund, they would intimate clearly that this amount has already been reimbursed to them from MES, (the concerned name of GE/GE/(I) AGE(I) formation to be mentioned) and that the refund be directly credited to the account of GE/GE/(I) AGE(I). In view of the peculiar situation, the appellant cannot be said to have passed on the burden of tax to any other person. We, therefore, do not find reason to justify that the principle of unjust enrichment can be applied in this case. 21. On the issue whether amount was merely a deposit and not duty, we concur with the view taken by the T....