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Judgment
This appeal has been filed by Aayushi Enterprise against order in Revision passed by Commissioner of Central Excise, Customs and Service Tax, Vadodara in exercise of powers under section 84 of the Finance Act, 1994. The Commissioner has vide impugned order set aside the order of Assistant Commissioner F.No. V/STC/VAD-II/Ref/Aushi13/2007/VADODARA Dated 30/12/2008.
Learned Counsel submitted that appellant is a partnership firm involved in the construction, promotion and development and also engaged in the business of sales and organizing the residential complex, flats, bungalows after construction, engaging the Civil Contractor, Architect, Designer, etc. The service tax was imposed on construction of complex with effect from 10/09/2004. Learned Counsel pointed out that following circulars were issued clarifying the scope of the said services:
(i) 80/10/2004-ST Dated 19.09.2004
(ii) B1/6/2005-TRu dated 27-07-205
(iii) V/DGST/22/Audit/Misc/1/2004/1/2004 dated 16.12.2006
The appellants obtained service tax registration on 24/07/2006 and paid the amount of Rs. 7,63,305/- on 27/07/2006 for the period 16/06/2005 to 30/06/2005. Thereafter, circular no. 332/35/2006-TRU dated 01/08/2006 was issued clarifying about the applicability of service tax on Real Estate Developers/Builders/Promoters. In terms of the said clarification, the appellant filed a refund claim of Service Tax paid by them under letter dated 13.02.2007. The show cause notice was issued proposing rejection of refund claim. However, after considering the facts and circumstances, the Assistant Commissioner of Central Excise & Customs, Service Tax Cell sanctioned the refund claim vide order in original dated 30.12.2008. In exercise of powers under section 84 of the Finance Act, 1994, the learned Commissioner of Central Excise & Customs, Vadodara made revisions of the said order. The appellants being aggrieved by the said order are in appeal before the Tribunal.
Learned Counsel for the appellant took us through copy of contract, sale agreement of the flat, sale agreement of the land. Learned Counsel pointed out that the appellant has acted as Developer and the construction of the residential complex was carried by engaging contractor. He argued that the decision of Commissioner is not in line with the circular no. 332/35/2006-TRU dated 01.08.2006 and 108/2009 ST dated 29.01.2009.
2.1 Learned Counsel argued that the appellant had constructed residential complex with more than 12 units by engaging contractors. Thus even if residential complex having more than 12 units has been constructed, the appellants are not liable to pay service tax because the units got constructed by engaging contractors and the appellant is only a Developer, not a contractor.
2.2. Learned Counsel further relied on the circular no. 108/2/2009 dated 29.01.2009 and claimed that the same is also applicable to the facts of the present case.
2.3 In further written submission submitted by the learned counsel on 08.09.2021, he informed that the appellant had entered into an agreement (Development agreement) with the land owners to develop the piece of land. In terms of said agreement it was required for the appellant to construct houses along with the basic infrastructure/amenities such as laying water pipelines, laying electric cables, roads, drainage system, etc. The appellant was also required to find customers for the houses. The appellant entered into agreement (agreement to sell) with the potential customers to sell the house. In terms of such agreement, the ownership of property will be transferred under sale agreement only after receipt of the full payment and when the house is fully constructed.
2.4 Learned Counsel also pointed out the Jurisdictional Commissioner has erred in making revision of OIO dated 30.12.2018 after 19.08.2009 when powers of revision under section 84 were withdrawn. He argued that in the instant circumstances the impugned order is not sustainable. He relied on the decision of Tribunal in the case of Bhawani Corporation vs CCE-2017 (3) GSTL 372 (T) and Securitrans India (P) Ltd. vs CST 2017 (49)(STR).
Learned Authorised Representative relied on the impugned order. He argued that the appellant purchased the land from proprietor and therefore, became the contractor.
We have considered rival submissions. The first and foremost issue to be decided is if the Commissioner at the time of passing the order had enjoyed the Revisionary powers or not. Section 84 of Finance Act was substituted on 19.08.2009. The powers of Commissioner for Revision of orders was done away at the effect from 19.08.2009. Tribunal in the following cases has held that no Order in Revision can be passed.
(1) Bhawani Corporation vs CCE-2017 (3) GSTL 372 (T) and
(2) Securitrans India (P) Ltd. vs CST 2017 (49)(STR).
In the case of Securitrans India (P) Ltd. (supra) following has been observed:
"5. Heard both sides and perused the records. A reference to Finance (No. 2) Act, 2009 reveals that Section 84 of the Finance Act, 1994 has been substituted w.e.f 19-8-2009. It is a fact that till the date of substitution, Section 84 provided the powers of revision to the Commissioner. It empowered Commissioner to call for the records of any proceeding in which an adjudicating authority [subordinate to him has passed a decision or order. The Section further empowers the Commissioner to pass orders in revision after] due process of law. However, it is seen that such revision powers had been replaced by the power to review w.e.f. 19-8-2009. The Show Cause Notice has been issued under the erstwhile Section 84 on 23-3-2010. On such date the Commissioner did not enjoy the powers of revision inasmuch as the Section 84 has been replaced on 19-8 2009. Consequently, I find that the Commissioner did not enjoy the powers of revision while issuing the Show Cause Notice and hence the Impugned Order has been passed without Jurisdiction."
In the instant case also powers of Revision has been exercised on 06/12/2010 whereas the power of revision under section 84 was withdrawn from 19.08.2009.
In view of above, the impugned order cannot be sustained and the same is set aside. Appeal is allowed.
(Pronounced in the open court on 26.10.2021)