2026-VIL-1231-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Refundable Advances for Construction Services - The Respondent, engaged in providing construction services, received advances from customers described as security deposits for finding suitable property. Department raised a service tax demand treating these advances as taxable consideration for construction services rendered - Whether service tax is payable on refundable advances received for providing construction services – HELD - The evidence clearly established that the advances were received as refundable security deposits for the service of finding suitable property for customers, and in the event of non-fulfillment thereof, the amounts were refunded back to the clients. No taxable service was rendered in respect of these advances. The amount received as refundable advance does not constitute taxable consideration. The contention that advances were reflected as current liabilities instead of short/long-term borrowings had no merit as such classification does not affect the nature of the payment - The challenge to the benefit of cum-tax value extended to the appellant is also not sustainable in view of the provisions of Section 67(2) of the Act which specifically provides that where tax is not separately recovered, the gross amount shall be treated as inclusive of tax. It is not the case of the Revenue that separate recovery of tax has been made by the appellant - The demand on advances was rightly dropped by the Commissioner. Answered in favour of assessee – The Revenue appeal is dismissed - Service Tax on Real Estate Agent Services relating to Meerut Development Authority Flats - Whether service tax is payable on the sale of immovable property where the seller had acquired ownership of the property through purchase – HELD - The purchase agreement and the allotment letter shows that the flats were originally allotted to another entity and were subsequently purchased by the assessee. Having acquired the flats and become the owner, the subsequent sale was merely a transaction of sale and purchase of its own immovable property and not a service. Such transaction does not fall within the ambit of service tax - The demand on real estate agent services relating to Meerut Development Authority flats was rightly dropped - Validity of Completion Certificate - Department contended that the certificate relied upon by the assessee was merely an occupancy certificate and not a completion certificate, and that statutory provisions take cognizance only of completion certificates - Whether the benefit of completion certificate can be denied on the ground that occupancy certificate was initially produced instead of completion certificate – HELD - The completion certificate issued by the Municipal Corporation of Delhi was rejected by the investigating officer merely on the ground of not producing the original. The assessee subsequently produced the original certificate which was verified and returned. The benefit cannot be denied to the assessee on the basis of such procedural non-compliance when the original certificate was later produced and verified.
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