CHANDRAKANT G. DHERE Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THIS appeal arises from Order -in -Appeal No. P -III/VM/363/2010, dated 20 -12 -2010 passed by the Commissioner of Central Excise (Appeals), Pune -III.

(2.) The appellant is a buyer of flat from one M/s. Joshi and Associates (Builder), holder of Service Tax registration. The appellant has deposited Rs. 2,70,000/ - with the Builder on 10 -12 -2007 as security deposit against payment of Service Tax, if it becomes payable. The Service Tax on the said services (construction of residential complex) was made effective w.e.f. 1 -7 -2010. The Board had issued a Circular No. , dated 29 -1 -2009, issued directions clarifying that whereunder any agreement of purchase/sale as per the provisions of Transfer of Property Act, does not by itself create any interest in or charge on such property between the proposed buyer (assessee) or the builder, in such case, the property remains under ownership of seller/builder and it is only after completion of the construction and full payment of agreed sum that the sale deed is executed and possession handed over resulting in transfer of ownership of the property. Thus, there is no service involved in such transaction and no Service Tax is accordingly exigible. Based on such clarification, the appellant filed refund claim which was rejected by the Assistant Commissioner vide Order -in -Original dated 7 -7 -2010 for the reason that the appellant had not submitted the NOC from the builder and also in view of the letter of the builder requesting the Revenue not to refund the amount to the appellant in view of some pending cases between builder and appellant before the Consumer Disputes Redressal Commission for the same matter. Being aggrieved, the appellant filed appeal before the Commissioner (Appeals), which was rejected by the impugned order upholding the rejection.

(3.) HEARD learned AR Shri N.N. Prabhudesai, Supdt., for the Revenue. On query raised by the Bench that where it is the condition mentioned for obtaining NOC from the builder, as admittedly the amount was paid by the appellant and same was found to be refundable and under which Section the Revenue could not have refunded the amount, on objection of the builder, to which no answer could be given by the learned AR. Having considered the facts on record and as per the report dated 19 -5 -2014 received through the learned AR from the Assistant Commissioner (Refund), I find that the rejection of the refund claim vide order dated 7 -7 -2010 is bad in law and on fact and accordingly, I allow the interest to the appellant from the date on which the Revenue received the amount i.e. 18 -6 -2009 to the date of disbursement i.e. 8 -7 -2013 at such rate notified under the Rules. Such refund shall be disbursed to the appellant within a period of four weeks from the receipt of the order without waiting for any formal application for refund from the appellant. Thus, the appeal stands allowed in the above terms.