Service tax paid on construction services provided to governmental departments for non-commercial purposes during the period 01.04.2015 to 29.02.2016 is refundable under Section 102 of the Finance Act, 1994, provided the service recipient is impleaded as a co-applicant to avoid the bar of unjust enrichment.

FINAL ORDER NO.50396/2026

BINU TAMTA:

1. Challenge in the present appeal is to the order-in-appeal ¹No. 75(RK)ST/JPR/2017-18 dated 12.03.2018 rejecting the refund application as the appellant has not placed the documents to prove that the services were provided to the Government and on the ground of unjust enrichment.

2. During the period from June 2015 to June 2016, the appellant has claimed to have provided services to M/s. Military Engineering Service (MES), Bhopal and Jaipur for construction of infrastructure of Pinaka Regiment etc., which included construction of civil structure and non-commercial building.

3. The construction services provided to Government, local authority or governmental authority were earlier exempted vide Entry Sl. No. 12(a) of Mega Exemption Notification No. 25/2012-ST dated 20.06.2012. With effect from 01.04.2015, the said entry was omitted vide Notification No. 06/2015-ST dated 01.03.2015. Therefore w.e.f. 01.04.2015, service tax was leviable on construction services provided to the Government, Local authority or governmental authority.

4. A new Entry Sl. No. 12(A) was inserted w.e.f. 01.03.2016, wherein the construction services provided to Government, local authority or governmental authority were exempted vide Notification No. 09/2016-ST dated 01.03.2016 subject to condition that the contract should have been entered prior to 01.03.2015 and on which appropriate stamp duty, where applicable, has been paid prior to such date.

5. For the intervening period from 01.04.2015 to 29.02.2016, vide Finance Act, 2016, Section 102 was inserted in the Finance Act, 1994. A special provision for exemption in certain cases relating to construction of Governmental buildings during the period 01.04.2015 to 29.02.2016 was made under Section 102 (1) in respect of contract entered into before 01.03.2015 and on which appropriate stamp duty, where applicable, has been paid before that date. Further, under Section 102 (2), provision of refund of service tax collected during the period was also made.

6. The appellant had filed refund claim of Rs.70,46,602/- on 11.11.2016 in respect of service tax paid during June 2015 to June 2016, on the services provided to M/s. Military Engineering Service (MES) Bhopal and Jaipur for construction of infrastructure of Pinaka Regiment etc. claiming that that no service tax was leviable on the above services during the period from June 2015 to June 2016 as the same were exempted under Serial No.12(A) of Exemption Notification No.25/2012-ST dated 20.06.2012, as amended vide Notification No.09/2016-ST dated 01.03.2016 and vide Section 102 (1) of Finance Act, 1994. The refund claim was filed under Section 102 (2) read with Section 11B of Central Excise Act, 1944 made applicable to the Service Tax.

7. Show cause notice dated 15.12.2006 was issued to the appellant for rejection of the refund claim of Rs.70,46,602/- filed by them under Section 11B of the CEA, 1944 on the grounds that they have not fulfilled the conditions laid down under Section 102 of the Finance Act, 1994 as well as the claim appeared to be of unjust enrichment as laid down in Section 11B (1) of Central Excise Act, 1944 made applicable to Service Tax matters also as per Section 83 of the Finance Act, 1994. The Assistant Commissioner of Service Tax, Ajmer vide Order-in-Original dated 02.02.2017 dismissed the refund application as the appellant has not submitted the copies of contract agreements and invoices and applicability of bar of unjust enrichment.

8. Aggrieved by the said Order-in-Ori