The Kolkata bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) has remanded the matter to the Adjudicating Authority, stating that the service should not be classified as construction services or renting of immovable property.
The Appellant, the service provider would be eligible to get the benefit of exemption Notification No. 26/2012, dated 20th June 2012, wherein it is provided that for the construction of complex, 70% abatement is granted. As per the appellant, since the Service Tax was paid by them to the service provider on the entire 100% and not on the 30%, they are eligible to get the refund of the Service Tax paid on the balance 70% portion. On this belief, they have filed their refund claims. However, both the lower authorities have rejected the refund claims. Being aggrieved, the Appellant is before the Tribunal.
Mr. Rajeev Agarwal, pointed out to wherein the Adjudicating Authority has clearly given a finding that the Appellant was not in a position to prove by way of any documentary evidence that the service provider M/s Rajarhat IT Park have not availed the Cenvat Credit for the inputs received by them, which is a necessary and requisite statutory condition under Notification No. 26/2012, dated 20th June 2012.
He also takes detailed findings of the Commissioner (Appeals), and has clearly held that even at the time of hearing before the Commissioner (Appeals), the Appellant was not in a position to prove that the service provider has deposited all the Service Tax collected from the Appellant. Secondly, he has not been able to prove that the service provider has not taken the Cenvat Credit for the inputs received by them. The Appellant was also not in a position to prove that the cost of land has been included in the total consideration received by Rajarhat. Finally, he has held that unless these three points are proved, the Appellant cannot claim that the service provider should have paid the Service Tax only on the balance 30% of the consideration so as to claim the present refund and after this he has dismissed their Appeal.
The bench found that the Appellant has been charged Service Tax by the service provider under the heading of “renting of immovable property” for the Lease Agreement entered with them. However, the Appellant has taken a different stand stating that the service provided by the service provider is that of “construction of commercial complex”. In that case, the service provider should have been granted the abatement of 70% in terms of Sl. No. 12 of Notification 26/2012-ST dated 20/6/2012.
The single member bench of the tribunal comprising R Muralisdhar ( Judicial member ) does not see any statutory provisions allowing the service recipient to dispute the classification of the service provider and take up the issue with the jurisdictional authorities of the service provider to re-classify the service or verify the already finalized ST-3 Returns. No third party can make such a request except for the concerned assessee himself. Accordingly, reject the request for remanding the matter to the Adjudicating Authority and dismiss the Appeal.
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