2025-VIL-464-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Construction of Residential Complex, Tax Refund - Construction of a colony of individual residential duplexes and being more than 12 in number with common facilities - Appellant paid the tax and interest under protest and later filed a refund claim, which was rejected - Whether the appellant's residential project consisting of independent residential duplex houses, falls under the definition of 'Residential Complex' under Section 65(91a) of the Finance Act, 1994 and is thus liable to service tax – HELD - The definition of 'Residential Complex' under Section 65(91a) clearly provides that it should comprise a building or buildings having more than twelve residential units. In the present case, the appellant had constructed independent duplex houses having only one residential unit each. Even if the appellant had constructed more than 12 such independent buildings, the nature of the activity would not be 'Construction of Residential Complex' and therefore, service tax cannot be levied - This issue is no more res integra as it has been settled by the Tribunal in the case of Macro Marvel Projects Ltd. v. Commissioner of Service Tax, Chennai, which was affirmed by the Supreme Court. The Tribunal followed the ratio of the Macro Marvel case and held that construction of individual residential units is not intended to be covered under the definition of 'Residential Complex' and is thus not liable to service tax - the appellant is entitled to the refund of the amount deposited under protest as it was not liable to pay service tax on the construction of independent residential duplex houses - The order rejecting the refund claim is set aside – the appeal is allowed - Service Tax - Unjust Enrichment, Burden of Tax - The Department had also rejected the refund claim on the ground of the bar of unjust enrichment, contending that the appellant had not discharged the tax liability and there was no evidence to show that the burden of tax was not passed on to the customers - Whether the refund claim can be rejected on the ground of unjust enrichment in the absence of any evidence that the burden of tax was passed on to the customers - HELD - The appellant had consistently contended since the beginning that it had not charged any service tax from its customers. The Department had ignored this contention and applied the bar of unjust enrichment without any evidence. The refund of service tax paid under protest cannot be rejected on the ground of unjust enrichment when there is no evidence that the burden of tax was passed on to the customers.
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