Custom, Excise & Service Tax Tribunal
Prajapita Brahma Kumaris Ishwariya ... vs Commissioner Central Goods And Service ... on 27 October, 2022
CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL, MUMBAI
REGIONAL BENCH
Service Tax Appeal No. 85279 of 2021
(Arising out of Order-in-Appeal No. SM/232/Appeals-II/ME/2020 dated
15.09.2020 passed by the Commissioner of GST & Central Excise (Appeals-
II), Mumbai)
M/s. Prajapita Brahma Kumaris Ishwariya Appellant
Vishwa Vidyalaya
23/24, Shankar Chhaya, 19 M.G. Road,
Ghatkopar (E), Mumbai 400 077.
Vs.
Commissioner of CGST & CE, Mumbai East Respondent
9th Floor, Lotus, Parel, Lotus Infocentre,
Near Parel Station, Parel (E), Mumbai.
Appearance:
Shri Mahesh Raichandani, Advocate, for the Appellant
Shri Nitin M. Tagade, Joint Commissioner, Authorised Representative
for the Respondent
CORAM:
HON'BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL)
HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL)
Date of Hearing: 27.10.2022
Date of Decision: 27.10.2022
FINAL ORDER NO. A/86045/2022
PER: SANJIV SRIVASTAVA
This appeal is directed against the order-in-appeal No
SM/232/Appeals-II/MB/2020 dated 15.09.2020 of the
Commissioner of CGST and Central Excise (Appeals-II), Mumbai.
By the impugned order, Commissioner (Appeals) has upheld the
rejection of the refund claim filed by the appellant.
2.1 Appellant is M/s. Prajapita Brahma Kumaris Ishwariya
Vishwa Vidyalaya, Ghatkopar (West). They filed the refund claim
in manner prescribed claiming refund of Service Tax of
Rs.30,85,155/- vide their letter dated 05.10.2018.
2.2 The Appellant, who was a service receiver (as client /
customer), has purchased shop / flat was Shop No. 3 in 'A' wing
and Flat no. 301 to 306 in 'A' wing & Flat no. 301 & 302 in 'B' in
Residential Building named as Bhaveshwar building No. 3
situated at FP No. 25, CTS No. 5953, Bhaveshwar Lane,
2 ST/85279/2021
Ghatkopar East, Mumbai - 400 077 from M/s. Yog Reality. They
paid the consideration along with service tax of Rs.30,85,155/-
to the service provider at the time of purchase of above
mentioned shop / flats. The refund claim was supported by
various documents as follows:
1. Letter dated 05.10.2018 of M/s. Yog Reality stating that
they have not claimed any refund of Service Tax of the
same amount of the same period.
2. Form- R application for Refund of Service Tax in respect of
M/s. Prajapita Brahma Kumaris Ishwariya Vishwa
Vidyalaya
3. Copy of Service Tax Return Oct 16 to March 17 & April 17
to June 17 pertaining to Developer/Service i.e. of M/s. Yog
Reality (STC NO. AABFY1597MSD001)
4. Copy of Sale agreement
5. Bank statement pertaining to M/s. Yog Reality for the
period from 07.12.2016 to 27.06.2017.
2.3 Appellant claimed that as per the entry 13 (c) of the
Notification No 25/2012-ST they were exempt from payment of
service tax and had paid the service tax wrongly at the time of
purchase of the said shops/ flats, to the exchequer through
service provider. Having become aware of the mistake, they
have filed this refund claim.
2.4 After examination of the refund claim the jurisdictional
officer issued deficiency memo to the appellant stating as
follows:
"On going through the claim the following discrepancy has been
noticed
(i) It is observed that, you as a service receiver
{client/customer) paid service tax along with
consideration to the developer (service provider for
service provided/agreeing to be provided towards
purchase of shop/flat in the project
developed/constructed by developer(service
provider) and claimed for refund for the said service
tax amount paid to the developer (service provider)
not to the Service Tax Department. It appears that
you are not "assessee" in terms of Section 65(7) of
3 ST/85279/2021
erstwhile finance act, 1994 as amended. Further, a
registered person under the finance Act, 1994 is
entitled to make refund application before the
competent authority. You are requested to clarify
whether you are registered with the Department for
providing/receiving any service in Service tax regime
and filling any service tax returns in form ST-3, and
if so, please submit the copy of the same. You are
also requested to submit details of Service tax
payment made to the developer along with
documentary evidences in respect of above refund
claim made.
(ii) As per statement (Annexure-1) submitted by you, it
is observed that service tax has been paid on March
17 and July 17, however claim has been filed on 05th
October, 2018. The claim is time barred as it has
been filed after expiry of one year. As per Section
11B of Central Excise Act, 1944 read with Section 83
of the Finance Act, 1994. The claim should be filed
within one year from the relevant date.
(iii) You are requested to submit the documentary
evidence showing you are registered under Section
12AA of the Income Tax Act, 1962 (43 of 1961) and
meant predominantly for religious use by general
public.
2.5 After considering the submissions made by the appellant,
original authority vide his order in original No
37/ALT/Refund/MB/Dn-IX/Prajapati/2018-19 dated 04.02.2019,
rejected the refund claim filed by the appellant both on merits
and ground of limitation.
2.6 Aggrieved appellant filed the appeal before Commissioner
(Appeals) who while setting aside the order on limitation upheld
the rejection of refund claim on merits.
2.7 Aggrieved appellant have filed this appeal.
2.8 Revenue has filed no appeal against the impugned order.
3.1 We have heard Shri Mahesh Raichandani, Advocate for the
appellant and Shri Nitin M. Tagade, Joint Commissioner,
Authorized Representative for the revenue.
4 ST/85279/2021
3.2 Arguing for the appellant learned counsel submits:
The only issue involved in the present appeal is in respect
of interpretation of the word "building", used in entry at Sl
No 13 (c) of the Mega Exemption Notification.
Appellant is registered under Section 12AA of the Income
Tax Act, 1961. They had purchased certain flats and shops
in the project being developed by the Yog Reality. At the
time of purchase they had paid the service tax due on the
transaction undertaken
Later on they discovered that they were exempt from
payment of this tax and claimed refund of the amount paid
by them as service tax.
By the impugned order, the only objection that
Commissioner (Appeal) has to their refund claim is that
they have received the specified services from service
provider, Yog Reality in respect of the flat and shops and
not in respect of the "building" hence the benefit of this
exemption cannot be allowed to them.
In the impugned order Commissioner (Appeal) has
categorically held that the refund claim made by them will
not be hit by the limitation as per Section1 1B of the
Central excise Act, 1944. Revenue has not filed any appeal
against this finding of the Commissioner (Appeal) and
hence these finding have become final.
The term building has not been defined by the Notification.
For understanding the meaning of the said word reference
is made to Merriam Webster Dictionary and the Concise
Oxford Dictionary.
In the case of Asha Murarka and others
[MANU/WB/0282/2012], Hon'ble Kolkata High Court has
held that "For the purpose of assessment of property tax,
the area occupied or owned by the writ petitioners would
be considered as a building within the meaning of
definition of building given in section 2 (5) of the Kolkata
Municipal Corporation Act, 1980."
Similarly in case of Notified Area Committee Nangal
Township [MANU/SC/0991/1998], Hon'ble Supreme Court
has held "building" means any house used for the purpose
of human habitation.
5 ST/85279/2021
By application of the ratio of the above two decisions it is
evident that flats and shops purchased by the appellant
would be covered by the term "building" used in the
Notification No 25/2012-ST at Sl No 13 (c).
In the impugned order, Commissioner (Appeal) has while
deciding the appeal rejected the refund claim filed by the
appellant on the ground which were never stated in the
show cause notice/ deficiency memo. It is settle law that
no authority could have travelled beyond the show cause
notice as has been held in the following decisions:
o Toyo Engineering India Limited [2006 (201) ELT 513
(SC)]
o Brindavan Beverages [2007 (213) ELT 487 (SC)]
o Ballarpur Industries Ltd. [2007 (215) ELT 489 (SC)]
o Reckitt and Colman of India Ltd [1996 (88) ELT 641
(SC)]
In case of Talanpur Ramsabha Bhawan [2020-TIOL-1307-
CESTAT-DEL], benefit of this exemption has been allowed
in similar case.
3.3 Learned authorized representative while reiterating the
findings recorded in the impugned order submits that:
Distinguished the decisions relied upon by the appellant.
Relied upon the decision of the Hon'ble Apex Court in case
of Dilip Kumar and Co, and stated that the terms used in
the notification should be construed strictly.
There was no protest filed by the appellant in the manner
as prescribed and hence the refund claim is time barred.
The refund claim in the present case cannot be allowed
without modification of the assessment order as has been
held by the Hon'ble Apex Court in the case of ITC Ltd.
[2019-TIOL-418-SC-Cus-LB] and by this tribunal in case
of Karanja Terminal and Logistics Pvt Ltd. [2021-TIOL-76-
CESTAT-Mum]
Issue of unjust refund needs to be examined.
4.1 We have considered the impugned order along with the
submissions made in appeal and during the course of arguments.
4.2 For rejecting the refund claim filed by the appellant original
authority has vide his order in original observed as follows:
6 ST/85279/2021
"1. have carefully gone through the aforesaid Refund Claim and
relevant documents on records, filed by the claimant alongwith
written submission dated 03.01.2019' submitted to this office on
04.01.2019 at the time of the PH.
2. I find that the claimant have filed a refund calm of
Rs.30,85,155/. I find that the said refund claim has been filed by
the claimant in the capacity of service recipient. The ground of
the said refund claim is that the claimant had purchased 08 flats
and a shop in the building constructed by the Developer from
M/s. Yog Reality. The claimant has argued that though as per the
Entry No.13(c) of Notification No. 25/2012-ST dated 20/06/2012
there was an exemption from service tax to them, on demand
from the Developer they had paid service tax amount to the
developer, refund of which they are now claiming.
3. It is an argument of the claimant that as per Entry No. 13(c)
of the Notification No. 25/2012-ST dated 20/06/2012
construction services provided to them were exempted service
and since they have paid service tax of Rs.30,85,155/- to the
Developer who subsequently deposited the same with
Government Exchequer, they are rightly claiming refund claim of
service tax paid by the Developer after collecting the same from
them.
4. I have carefully gone through the text of Entry No. 13(c) of
the Notification No. 25/2012 ST dated 20/06/2012. I find that
the said entry provided an exemption from service tax payment
for the services provided by way of construction, erection,
commissioning installation, completion, fitting out, repair,
maintenance, renovation or alteration of - a building owned by
an entity registered under section 12AA of the Income Tax Act,
1961 (43 of 1961) and meant predominantly for religious use by
general public. On plain reading of the said entry it appears that
the said exemption was available only if the above mentioned
services like construction, erection, repair, maintenance etc.
were provided in respect to a building and not to a single flat or
shop owned by an entity registered under Section 12AA of the
Income Tax Act'1961. In view of the same, I find that the
developer had correctly assessed and paid service tax on flats
and a shop sold to the claimant. Therefore, on this ground alone,
7 ST/85279/2021
I hold that the claimant is not eligible for refund of service tax
amounting to Rs.30,85,155/-
5. Moreover, I find that the claimant have filed the refund claim
on 05/10/2018 to this office. As per explanation B() of Section
118 of Central Excise Act, 1944, the relevant date for filing
refund claim is one year from the date of payment of duty. M/s.
Yog Reality vide letter dated 05.10.2018 informed that they have
deposited Service tax collected from the claimant, to the
Government Exchequer, an declared in the Service Tax returns
for the year 2016-2017 & 2017-2018 ( April to June 2017). It is
seen that the return for the period April to June 2017 was filed
on 11.07.2017. In the instant case claim for refund has been
made on 05/10/2018 and therefore is time barred under the
provisions of Section 11B of the Central Excise Act, 1944 and as
such the refund claim is liable for rejection on the ground of
limitation."
4.2 For upholding the order in original on merits Commissioner
(Appeals) has in the impugned order observed as follows:
"6. I have carefully gone through the facts of the case, records
placed in the file and submission made during the course of
personal hearing. Considering the issue involved, the short
questions to be decided in the instant case is whether the
adjudicating authority rightly rejected the refund claim filed by
the Appellant in respect of Service Tax paid on the purchase of
shops/flats from M/s Yog Reality, developer (Service Provider).
The issues to be decided in the instant case are stated as below:
(1) Whether the service provided by M/s. Yog Reality to the
Appellant by way of construction of building and for flats and
shops owned by the Appeke registered under Section 12AA of
the Income Tax Act. were exempted video Entry no. 13(c) of the
Notification No. 25/2012-ST dated 20.06.2012?
(ii) Whether the refund claim is liable for rejection on the
grounds of limitations
7. As regards the first issue, I find that the Appellant had
purchased under constructions 8(Eight) Flats and Shop from M/s.
Yog Reality in terms of the Sale Agreement dated 19.12.2016.
The Appellant paid Service Tax in instalments as and when
8 ST/85279/2021
demanded by the developer M/s. Yog Reality. Further, the
developer deposited the amount so collected in the government
treasury and certified the same. The Appellant held that no
Service Tax was payable on the above transaction as a religious
body registered under section 12AA of the Income Tax Act, 1961
the services provided by the developer are eligible for exemption
in terms of Notification No. 25/20012-STdated 20.06.2012 vide
Entry No. 13 (c). However, the above view was not shared by
M/s. Yog Reality (developer) and the tax was paid under protest
by the Appellant to the developer. Now, the Appellant have filed
the refund claim for the Service Tax which was paid under
protest. However, the adjudicating authority rejected the entire
refund claim of the Appellant on the grounds mentioned in para
3 above.
7.1. With effect from 01.07.2012 all services provided in India
became taxable except for ones specified under section 66D of
Finance Act, 1994 (negative list of services) or those exempt
under the mega exemption notification No.25/2012-ST.
At the outset, I would discuss the relevant charging portion of
the Section 66B which is extracted below:
"There shall be levied a tax (hereinafter referred to as the
Service Tax) at the rate of twelve percent on the value of all
services,, other than those services specified in the negative fist,
provided or agreed to be provided in the taxable territory by one
person to another and collected in such manner as may be
prescribed.."
Section 65B (44) of the Finance Act, 2012 defines the term
'service' is extracted below:
"65B. in this Chapter, unless the context otherwise requires,
(44) "service" means any activity carried out by a person for
another for consideration, and includes a declared service, but
excludes
...."
The term "service" has been defined as any activity carried on
for a consideration by one person for another. As the term
"activity" and "consideration" have not been defined in the
9 ST/85279/2021
Finance Act, 1994. Hence, the same would assume wider
encompass and application.
Section 66D enumerates the list of services which are out of the
purview of Service Tax.
For the sake of brevity, I will reproduce entry No.13 (c) of
Notification 25/2012-ST which is as follows:
Notification 25/2012-ST dated 20.06.2012 as amended exempts
certain specified taxable services from the whole of Service Tax
leviable under section 66B of the Finance Act, 1994.
As per Sr. No. 13 (c) of the above notification, following services
are exempt from the whole of Service Tax leviable under section
66B of the Finance Act, 1994:
13. Services provided by way of construction, erection,
commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of:
(c) a building owned by an entity registered under section 12 AA
of the Income tax Act, 1961(43 of 1961) and meant
predominantly for religious use by general public:
7.2 From a bare reading of the provisions above, it is apparently
clear that the said exemption has been provided to services
which are provided by way of construction, erection,
commissioning, installation, completion, fitting out, repair,
maintenance, renovation, or alteration of building owned by an
entity registered under section 12AA of the Income Tax Act and
such building are to be used predominantly for religious use. In
this regard, the Appellant argued that the term 'building' has not
been defined under the said notification neither under the
Finance Act or the Rules made thereunder. Further, the common
parlance and dictionary meanings of the word 'building'
i) A structure with a roof and walls, such as a house or
factory.(Ref: www.oxforddictionaries.com)
ii) a usually roofed and walled structure built for permanent use
(as for a dwelling)-Merriam Webster Dictionary
iii) a structure with walls and a roof, such as a house or
factory(Ref : www.collinsdictionary.com)
10 ST/85279/2021
7.3 It is the contention of the Appellant that Flat is understood to
be a place, where two houses are built one above another as in
modern times a practice has grown up of putting separate
houses one above the other. For legal and ordinary purposes,
they are separate houses and each Flat is separately let and
occupied. One has no connection with those above or below,
except in so far as it may derive support from those below
instead of from the ground, as in the case of ordinary houses.
7.4 The Appellant has relied upon the decision in the case of
Notified Area Committee Nangal Township v. Bhakra
Management Board, Chandigarh and Ors. J.T. 1999 (5) SC 349,
where the question that came up for consideration before the
Supreme Court was whether the Notified Area Committee was
correct in assessing the annual value of row of quarters in one
block as a 'building for the purpose of levying house tax under
the Punjab Municipal Act, 1911. The expression, 'building' in the
Punjab Municipal Act, 1911 is defined in Clause (2) of Section 3
of the Act to mean "any shop, house, hut, outhouse, shed or
stable, whether used for the purpose of human habitation or
otherwise and whether of masonry, bricks, wood, mud, thatch,
metal or any other material whatever and includes a wall and a
well." While dealing with the definition of building' in the context
of row of quarters in one block as to whether the entire row of
bungalow/quarter is one building for assessing the rental value
of property tax, the Supreme Court held that simply because
some quarters or some bungalows have common wall would not
mean that such quarter or bungalow ceases to be a house. A
house is a place of dwelling or habitation and each quarter or
bungalow is allotted to a separate employee who lives therein
with his family. Hon'ble Supreme Court did not accept the
proposition that quarters in one row having common wall though
each separating each other would mean one 'building' for the
purpose of arriving at an annual value. If the house is built by
the side of the other house in one row having common wall then
they could be treated as a separate 'building' for the purposes of
property tax.
7.5 It is the contention of the Appellant that from the reading of
entry 13(c) it is crystal clear that the intention of the
11 ST/85279/2021
Government is to grant exemption to the "entity registered
under section 12 AA of the Income tax Act, 1961 and meant
predominantly for religious use by general public" on the
services received by them for building owned by them. The
exemption is "qua" the entity. The exemption is granted to the
institute. The exemption is denied by the revenue that the flats
were predominantly for religious use by the general public. In
view of the ratio of Hon'ble Supreme Court in the case of Notified
Area Committee Nangal Township v. Bhakra Management Board,
Chandigarh and Ors. J.T. 1999 (5) SC 349 the flats in a multi-
storied building though having common wall would be considered
a separate 'building', qua the religious institution, for the
purposes of the benefit of the Notification.
7.6 As regards the argument above that it was the intention of
the Government in granting exemption qua-entity, I find that in
the subsequent decision on the interpretation of exemption
notification the Hon'ble Supreme Court in the case of DILIP
KUMAR & COMPANY, 2018 (361) E.L.T. 577 (S.C.) has held that
where the words in a statute are clear, plain and unambiguous
and only one meaning can be inferred, Courts are bound to give
effect to the said meaning irrespective of the consequences. In
applying the rule of plain meaning any hardship and
inconvenience cannot be the basis to alter the meaning to the
language employed by the legislation especially in fiscal statutes
and penal statutes:
"19. The well-settled principle is that when the words in a
statute are clear, plain and unambiguous and only one meaning
can be inferred, the Courts are bound to give effect to the said
meaning irrespective of consequences. If the words in the
statute are plain and unambiguous, it becomes necessary to
expound those words in their natural and ordinary sense. The
words used declare the intention of the Legislature. In Kanai Lal
Sur v. Paramnidhi Sadhukhan, AIR 1957 SC 907, it was held that
if the words used are capable of one construction only then it
would not be open to the Courts to adopt any other hypothetical
construction on the ground that such construction is more
consistent with the alleged object and policy of the Act.
12 ST/85279/2021
20. In applying rule of plain meaning any hardship and
inconvenience cannot be the basis to alter the meaning to the
language employed by the legislation. This is especially so in
fiscal statutes and penal statutes. Nevertheless, if the plain
language results in absurdity, the Court is entitled to determine
the meaning of the word in the context in which it is used
keeping in view the legislative purpose [Assistant Commissioner,
Gadag Sub-Division, Gadag v. Mathapathi Basavannewwa, 1995
(6) SCC 355]. Not only that, if the plain construction leads to
anomaly and absurdity, the Court having regard to the hardship
and consequences that flow from such a provision can even
explain the true intention of the legislation. Having observed
general principles applicable to statutory interpretation, it is now
time to consider rules of interpretation with respect to taxation.
It also held that no regard should be made to intendment while
making Interpretation of taxing statute and matter should be
governed wholly by the language of the notification, equity or
intendment have no place in interpretation of a tax statute:
22. We are not suggesting that literal rule de hors the strict
interpretation nor one should ignore to ascertain the interplay
between 'strict interpretation and literal interpretation. We may
reiterate at the cost of repetition that strict interpretation of a
statute certainly involves literal or plain meaning test. The other
tools of interpretation, namely contextual or purposive
interpretation cannot be applied nor any resort be made to look
to other supporting material, especially in taxation statutes.
Indeed, it is well-settled that in a taxation statute, there is no
room for any intendment; that regard must be had to the clear
meaning of the words and that the matter should be governed
wholly by the language of the notification. Equity has no place in
interpretation of a tax statute. Strictly one has to look to the
language used; there is no room for searching intendment nor
drawing any presumption. Furthermore, nothing has to be read
into nor should anything be implied other than essential
inferences while considering a taxation statute."
7.7 Further, it also held that the burden to prove for its
entitlement is on the assessee claiming exemption and If there is
any ambiguity in exemption Notification, benefit of such
13 ST/85279/2021
ambiguity cannot be claimed by assessee and it must be
interpreted in favour of Revenue. It also held that the ratio of
Supreme Court judgment in Sun Export Corporation (1997 (93)
E.L.T. 641 (S.C.)] and all decisions taking similar view as in Sun
Export Corporation (supra) were now being overruled :
"52. To sum up, we answer the reference holding as under
(1) Exemption notification should be interpreted strictly;
the burden of proving applicability would be on the
assessee to show that his case comes within the
parameters of the exemption clause or exemption
notification.
(2) When there is ambiguity in exemption notification which
is subject to strict interpretation, the benefit of such
ambiguity cannot be claimed by the subject assessee
and it must be interpreted in favour of the revenue.
(3) The ratio in Sun Export case (supra) is not correct and
all the decisions which took similar view as in Sun
Export case (supra) stands overruled."
7.8 Similarly, I also find that Hon'ble High Court Delhi in the
case of J.KULTAR EXPORTS Versus COMMISSIONER OF CENTRAL
EXCISE, DELHI-I 2020 (36) G.S.T.L. 208 (Del.) has also held:
"17. It is trite, that while interpreting exemption notifications,
such notifications have to be interpreted, stricto sensu
[Commissioner of Customs (Import), Mumbai v. Dilip Kumar &
Co. (2018) 9 SCC 1 = 2018 (361) E.L.T. 577 (S.C.)];
Commissioner of Central Excise v. Hari Chand Shri Gopal &
Others (2011) 1 SCC 236 = 2010 (260) E.L.T. 3 (S.C.);
Commissioner of Central Excise v. Mahaan Dairies (2004) 11
SCC 798 = 2004 (166) E.L.T. 23 (S.C.)].
The Supreme Court in Saraswati Sugar Mills (2011 (270) E.L.T.
465 (S.C.)], has affirmed this principle, assailing in paragraph 7,
as follows:
"7. ... A party claiming exemption has to prove that he/it is
eligible for exemption contained in the notification. An exemption
notification has to be strictly construed. The conditions for taking
benefit under the notification are also to be strictly interpreted.
When the wordings of notification is clear, then the plain
14 ST/85279/2021
language of the notification must be given effect to. By way of
an interpretation or construction, the Court cannot add or
substitute any word while construing the notification either to
grant or deny exemption. The Courts are also not expected to
stretch the words of notification or add or subtract words in
order to grant or deny the benefit of exemption notification. In
Bombay Chemicals (P) Ltd. v. CCE - (1995) Supp (2) SCC 646, a
three Judge Bench of this Court held that an exemption
notification should be construed strictly, but once an article is
found to satisfy the test by which it falls in the notification, then
it cannot be excluded from it by construing such notification
narrowly".
19. Therefore, the clause 2(e) of the Notification No. 41/2007-
S.T. must be applied strictly, and the Appellant cannot
selectively seek relief of the said notification. The CESTAT has
passed a laconic, well-reasoned and thorough order upholding
the order of the Commissioner (Appeals), which merits
absolutely no interference by us.
20. Therefore, the question of law raised in this appeal is
answered against the Appellant and in favour of the Respondent
and this appeal is hereby dismissed."
7.9 In view of the above, while interpreting the exemption
notification a Strict interpretation needs to be taken, hence the
impugned order of the lower adjudicating authority rejecting the
refund claims are justifiable and the Appellant will not be eligible
for the benefit of Entry No. 13(C) of the Notification No.
25/2012-ST dated 20.06.2012. Held accordingly."
4.3 By the impugned order Commissioner (Appeals) has held
that the refund claim filed by the appellant was filed in time and
will not be hit by the limitation as provided for in terms of
Section 11B of Central Excise Act, 1944 read along with the
Section 83 of the Finance Act, 1994. Revenue has not filed any
appeal against this before the tribunal. In the appeal filed by the
appellant revenue cannot take up this ground for getting a
decision in their favour. Thus the ground taken by the authorized
representative in this respect needs to be rejected for this
reason only.
15 ST/85279/2021
4.4 The only ground thus for rejection of the refund claim is
denial of exemption as claimed by the appellant in terms of Sl No
13 (c) of the notification No 25/2012-ST. The said entry has
been reproduced by the Commissioner (Appeals) in the
impugned order in para 7.1 of the impugned order. Revenue has
relied upon the decision of the Hon'ble Apex Court in the case of
Dilip Kumar & Co and the decision of Hon'ble Delhi High Court in
the case of J.Kultar Exports to hold that by applying the
principles of strict interpretation of the Notification the
exemption claimed by the appellant cannot be allowed.
4.5 We refer back to the decision of the Hon'ble Supreme
Court in the case of Dilip Kumar and Co., wherein on the issue of
strict interpretation, literal interpretation and interpretation of
the exemption notification, Hon'ble Apex Court has observed as
follows:
"22. At the outset, we must clarify the position of 'plain
meaning rule or clear and unambiguous rule' with respect of tax
law. 'The plain meaning rule' suggests that when the language in
the statute is plain and unambiguous, the Court has to read and
understand the plain language as such, and there is no scope for
any interpretation. This salutary maxim flows from the phrase
"cum inverbis nulla ambiguitas est, non debet admitti voluntatis
quaestio". Following such maxim, the Courts sometimes have
made strict interpretation subordinate to the plain meaning rule
[Mangalore Chemicals case (Infra para 37).], though strict
interpretation is used in the precise sense. To say that strict
interpretation involves plain reading of the statute and to say
that one has to utilize strict interpretation in the event of
ambiguity is self-contradictory.
23. Next, we may consider the meaning and scope of 'strict
interpretation', as evolved in Indian law and how the higher
Courts have made a distinction while interpreting a taxation
statute on one hand and tax exemption notification on the other.
In Black's Law Dictionary (10th Edn.) 'strict interpretation' is
described as under :
Strict interpretation. (16c) 1. An interpretation according to the
narrowest, most literal meaning of the words without regard for
context and other permissible meanings. 2. An interpretation
16 ST/85279/2021
according to what the interpreter narrowly believes to have been
the specific intentions or understandings of the text's authors or
ratifiers, and no more. - Also termed (in senses 1 & 2) strict
construction, literal interpretation; literal construction; restricted
interpretation; interpretatio stricta; interpretatio restricta;
interpretatio verbalis. 3. The philosophy underlying strict
interpretation of statutes. - Also termed as close interpretation;
interpretatio restrictive.
See strict constructionism under constructionism. Cf. large
interpretation; liberal interpretation (2).
"Strict construction of a statute is that which refuses to expand
the law by implications or equitable considerations, but confines
its operation to cases which are clearly within the letter of the
statute, as well as within its spirit or reason, not so as to defeat
the manifest purpose of the legislature, but so as to resolve all
reasonable doubts against the applicability of the statute to the
particular case.' Wiliam M. Lile et al., Brief Making and the use of
Law Books 343 (Roger W. Cooley & Charles Lesly Ames eds., 3d
ed. 1914).
"Strict interpretation is an equivocal expression, for it means
either literal or narrow. When a provision is ambiguous, one of
its meaning may be wider than the other, and the strict (i.e.,
narrow) sense is not necessarily the strict (i.e., literal) sense."
John Salmond, Jurisprudence 171 n. (t) (Glanville L. Williams
ed., 10th ed. 1947).
24. As contended by Ms. Pinky Anand, Learned Additional
Solicitor General, the principle of literal interpretation and the
principle of strict interpretation are sometimes used
interchangeably. This principle, however, may not be sustainable
in all contexts and situations. There is certainly scope to sustain
an argument that all cases of literal interpretation would involve
strict rule of interpretation, but strict rule may not necessarily
involve the former, especially in the area of taxation. The
decision of this Court in Punjab Land Development and
Reclamation Corporation Ltd., Chandigarh v. Presiding Officer,
Labour Court Chandigarh and Ors., (1990) 3 SCC 682, made the
said distinction, and explained the literal rule-
17 ST/85279/2021
"The literal rules of construction require the wording of the Act to
be construed according to its literal and grammatical meaning
whatever the result may be. Unless otherwise provided, the
same word must normally be construed throughout the Act in
the same sense, and in the case of old statutes regard must be
had to its contemporary meaning if there has been no change
with the passage of time."
That strict interpretation does not encompass strict - literalism
into its fold. It may be relevant to note that simply juxtaposing
'strict interpretation' with literal rule' would result in ignoring an
important aspect that is 'apparent legislative intent'. We are
alive to the fact that there may be overlapping in some cases
between the aforesaid two rules. With certainty, we can observe
that, 'strict interpretation' does not encompass such literalism,
which lead to absurdity and go against the legislative intent. As
noted above, if literalism is at the far end of the spectrum,
wherein it accepts no implications or inferences, then 'strict
interpretation' can be implied to accept some form of essential
inferences which literal rule may not accept.
25. We are not suggesting that literal rule de hors the strict
interpretation nor one should ignore to ascertain the interplay
between 'strict interpretation' and 'literal interpretation'. We may
reiterate at the cost of repetition that strict interpretation of a
statute certainly involves literal or plain meaning test. The other
tools of interpretation, namely contextual or purposive
interpretation cannot be applied nor any resort be made to look
to other supporting material, especially in taxation statutes.
Indeed, it is well-settled that in a taxation statute, there is no
room for any intendment; that regard must be had to the clear
meaning of the words and that the matter should be governed
wholly by the language of the notification. Equity has no place in
interpretation of a tax statute. Strictly one has to look to the
language used; there is no room for searching intendment nor
drawing any presumption. Furthermore, nothing has to be read
into nor should anything be implied other than essential
inferences while considering a taxation statute.
26. Justice G.P. Singh, in his treatise 'Principles of Statutory
Interpretation' (14th ed. 2016 p.-879) after referring to Re,
18 ST/85279/2021
Micklethwait, (1885) 11 Ex 452; Partington v. A.G., (1869) LR 4
HL 100; Rajasthan Rajya Sahakari Spinning & Ginning Mills
Federation Ltd. v. Deputy CIT, Jaipur, (2014) 11 SCC 672, State
Bank of Travancore v. Commissioner of Income Tax, (1986) 2
SCC 11 and Cape Brandy Syndicate v. IRC, (1921) 1 KB 64,
summed up the law in the following manner -
"A taxing statute is to be strictly construed. The well-established
rule in the familiar words of LORD WENSLEYDALE, reaffirmed by
LORD HALSBURY AND LORD SIMONDS, means : 'The subject is
not to be taxed without clear words for that purpose : and also
that every Act of Parliament must be read according to the
natural construction of its words. In a classic passage LORD
CAIRNS stated the principle thus : "If the person sought to be
taxed comes within the letter of the law he must be taxed,
however great the hardship may appear to the judicial mind to
be. On the other hand, if the Crown seeking to recover the tax,
cannot bring the subject within the letter of the law, the subject
is free, however apparently within the spirit of law the case
might otherwise appear to be. In other words, if there be
admissible in any statute, what is called an equitable
construction, certainly, such a construction is not admissible in a
taxing statute where you can simply adhere to the words of the
statute. VISCOUNT SIMON quoted with approval a passage from
ROWLATT, J. expressing the principle in the following words : "In
a taxing Act one has to look merely at what is clearly said. This
is no room for any intendment. There is no equity about a tax.
There is no presumption as to tax. Nothing is to be read in,
nothing is to be implied. One can only look fairly at the language
used."
It was further observed :
"In all tax matters one has to interpret the taxation statute
strictly. Simply because one class of legal entities is given a
benefit which is specifically stated in the Act, does not mean that
the benefit can be extended to legal entities not referred to in
the Act as there is no equity in matters of taxation...."
Yet again, it was observed :
"It may thus be taken as a maxim of tax law, which although not
to be overstressed ought not to be forgotten that, "the subject is
19 ST/85279/2021
not to be taxed unless the words of the taxing statute
unambiguously impose the tax on him", [Russel v. Scott, (1948)
2 All ER 1]. The proper course in construing revenue Acts is to
give a fair and reasonable construction to their language without
leaning to one side or the other but keeping in mind that no tax
can be imposed without words clearly showing an intention to lay
the burden and that equitable construction of the words is not
permissible [Ormond Investment Co. v. Betts, (1928) AC 143].
Considerations of hardship, injustice or anomalies do not play
any useful role in construing taxing statutes unless there be
some real ambiguity [Mapp v. Oram, (1969) 3 All ER 215]. It has
also been said that if taxing provision is "so wanting in clarity
that no meaning is reasonably clear, the Courts will be unable to
regard it as of any effect [IRC v. Ross and Coutler, (1948) 1 All
ER 616]."
Further elaborating on this aspect, the Learned author stated as
follows :
"Therefore, if the words used are ambiguous and reasonable
open to two interpretations benefit of interpretation is given to
the subject [Express Mill v. Municipal Committee, Wardha, AIR
1958 SC 341]. If the Legislature fails to express itself clearly and
the taxpayer escapes by not being brought within the letter of
the law, no question of unjustness as such arises [CIT v. Jalgaon
Electric Supply Co., AIR 1960 SC 1182]. But equitable
considerations are not relevant in construing a taxing statute,
[CIT, W.B. v. Central India Industries, AIR 1972 SC 397], and
similarly logic or reason cannot be of much avail in interpreting a
taxing statute [Azam Jha v. Expenditure Tax Officer, Hyderabad,
AIR 1972 SC 2319]. It is well-settled that in the field of taxation,
hardship or equity has no role to play in determining eligibility to
tax and it is for the Legislature to determine the same [Kapil
Mohan v. Commr. of Income Tax, Delhi, AIR 1999 SC 573].
Similarly, hardship or equity is not relevant in interpreting
provisions imposing stamp duty, which is a tax, and the Court
should not concern itself with the intention of the Legislature
when the language expressing such intention is plain and
unambiguous [State of Madhya Pradesh v. Rakesh Kohli & Anr.,
20 ST/85279/2021
(2012) 6 SCC 312]. But just as reliance upon equity does not
avail an assessee, so it does not avail the Revenue."
The passages extracted above, were quoted with approval by
this Court in at least two decisions being Commissioner of
Income Tax v. Kasturi Sons Ltd., (1999) 3 SCC 346 and State of
West Bengal v. Kesoram Industries Limited, (2004) 10 SCC 201
[hereinafter referred as 'Kesoram Industries case' for brevity]. In
the later decision, a Bench of seven-Judges, after citing the
above passage from Justice G.P. Singh's treatise, summed up
the following principles applicable to the interpretation of a
taxing statute :
"(i) In interpreting a taxing statute, equitable considerations
are entirely out of place. A taxing statute cannot be interpreted
on any presumption or assumption. A taxing statute has to be
interpreted in the light of what is clearly expressed : it cannot
imply anything which is not expressed : it cannot import
provisions in the statute so as to supply any deficiency : (ii)
Before taxing any person, it must be shown that he falls within
the ambit of the charging section by clear words used in the
section; and (iii) If the words are ambiguous and open to two
interpretations, the benefit of interpretation is given to the
subject and there is nothing unjust in a taxpayer escaping if the
letter of the law fails to catch him on account of Legislature's
failure to express itself clearly".
27. Now coming to the other aspect, as we presently discuss,
even with regard to exemption clauses or exemption
notifications issued under a taxing statute, this Court in some
cases has taken the view that the ambiguity in an exemption
notification should be construed in favour of the subject. In
subsequent cases, this Court diluted the principle saying that
mandatory requirements of exemption clause should be
interpreted strictly and the directory conditions of such
exemption notification can be condoned if there is sufficient
compliance with the main requirements. This, however, did not
in any manner tinker with the view that an ambiguous
exemption clause should be interpreted favouring the revenue.
Here again this Court applied different tests when considering
the ambiguity of the exemption notification which requires strict
21 ST/85279/2021
construction and after doing so at the stage of applying the
notification, it came to the conclusion that one has to consider
liberally."
4.5 Thus it is clear from the above in the case of Dilip Kumar &
Co, Hon'ble Supreme Court has itself rejected the argument
advanced to the effect that strict interpretation and literal
interpretation are the same. After taking note of the decision in
the case of Dilip Kumar & Co., Hon'ble Supreme Court has in
case of
(i) Linde India Ltd. [2020 (36) GSTL 3 (SC)], Hon'ble Apex
Court observed:
"16. The term 'medicine' is not defined in the 1940 Act. It is a
trite principle of interpretation that the words of a statute must
be construed according to the plain, literal and grammatical
meaning of the words. Justice G.P. Singh in his seminal work
Principles of Statutory Interpretation states :
"The words of a statute are first understood in their natural,
ordinary or popular sense and phrases and sentences are
construed according to their grammatical meaning, unless that
leads to some absurdity or unless there is something in the
context or in the object of the statute to suggest the
contrary...in the statement of the rule, the epithets 'natural',
'ordinary', 'literal', grammatical' and 'popular' are employed
almost interchangeably.
...
It is often said that a word, apart from having a natural, ordinary or popular meaning (including other synonyms i.e. literal, grammatical and primary), may have a secondary meaning which is less common e.g. technical or scientific meaning. But once it is accepted that natural, ordinary or popular meaning of the word is derived from its context, the distinction drawn between different meanings loses much of its relevance."
Similarly, Craies on Statute Law states :
"One of the basic principles of interpretation of Statutes is to construe them according to plain, literal and grammatical meaning of the words. If that is contrary to, or inconsistent with, any express intention or declared purpose of the Statute, or if it 22 ST/85279/2021 would involve any absurdity, repugnancy or inconsistency, the grammatical sense must then be modified, extended or abridged, so far as to avoid such an inconvenience, but no further. The onus of showing that the words do not mean what they say lies heavily on the party who alleges it. He must advance something which clearly shows that the grammatical construction would be repugnant to the intention of the Act or lead to some manifest absurdity."
The words of a statute should be first understood in their natural, ordinary or popular sense and phrases and sentences should be construed according to their grammatical meaning, unless that leads to some absurdity or unless there is something in the context, or in the object of the statute to suggest the contrary. Where a word has a secondary meaning, the assessment is whether the natural, ordinary or popular meaning flows from the context in which the word has been employed. In such cases, the distinction disappears and Courts must adopt the meaning which flows as a matter of plain interpretation and the context in which the word appears."
(ii) Accelor Mittal Nippon Steel India Ltd. [2022 (379) ELT 418 (SC)] has observed as follows:
"14.1 While the exemption notification should be liberally construed, beneficiary must fall within the ambit of the exemption and fulfill the conditions thereof. In case such conditions are not fulfilled, the issue of application of the notification does not arise.
14.2 It is settled law that the notification has to be read as a whole. If any of the conditions laid down in the notification is not fulfilled, the party is not entitled to the benefit of that notification. An exception and/or an exempting provision in a taxing statute should be construed strictly and it is not open to the Court to ignore the conditions prescribed in industrial policy and the exemption notifications.
14.3 The exemption notification should be strictly construed and given meaning according to legislative intendment. The statutory provisions providing for exemption have to be interpreted in the light of the words employed in them and there 23 ST/85279/2021 cannot be any addition or subtraction from the statutory provisions.
14.4 As per the law laid down by this Court in catena of decisions, in the taxing statute, it is the plain language of the provision that has to be preferred, where language is plain and is capable of determining defined meaning. Strict interpretation to the provision is to be accorded to each case on hand. Purposive interpretation can be given only when there is an ambiguity in the statutory provision or it alleges to absurd results, which is so not found in the present case.
14.5 In the present case, the intention of the State to provide the incentive under the incentive policy was to give benefit of exemption from payment of purchase tax was to the specific class of industries and, more particularly, as per the list of 'eligible industries'. Exemption was not available to the industries listed in the 'ineligible' industries. It was never the intension of the State Government while framing the incentive policy to grant the benefit of exemption to 'ineligible industries' like the power producing industries like the EPL, which as such was put in the list of 'ineligible' industries.
14.6 Now, so far as the submission on behalf of the respondent that in the event of obscure in a provision in a fiscal statute, construction favourable to the assessee should be adopted is concerned, the said principle shall not be applicable to construction of an exemption notification, as it is clear and not ambiguous. Thus, it will be for the assessee to show that he comes within the purview of the notification. Eligibility clause, it is well settled, in relation to exemption notification must be given effect to as per the language and not to expand the scope deviating from the language. There is a vast difference and distinction between a charging provision in a fiscal statute and an exemption notification."
4.6 With the above observations of the Apex Court we consider the entry at S No 13 (c) of the Exemption Notification No 25/2012-ST., what has been exempted from payment of the service tax by the said entry is a building owned by an entity registered under section 12 AA of the Income tax Act, 1961(43 of 1961) and meant predominantly for religious use by general 24 ST/85279/2021 public. Undisputedly the appellant is an entity registered under section 12AA of Income Tax Act, 1961 (43 of 1961), and the premises held by them are meant predominantly for religious use by general public. Thus in our view the appellant are entity who are eligible to claim the benefit of this exemption. revenue also do not dispute this aspect. In the case of Talanpur Ramsabha Bhavan [2020=TIOL-1307-CESTAT-Del] following has been held:
"8. Having considered the rival contentions, I am satisfied that the appellant is in possession of the certificate of registration under Section 12A(a) read with Section 12AA of the Income Tax Act. The certificate is granted under Section 12A and the procedure for grant of certificate is given in Section 12AA of the Income Tax Act. Further, it is evident from the certificate of registration dated 8-12-1998, that the appellant is having the status of being registered under the provisions of Section 12AA of the Income Tax Act. Further, the appellant has also led evidence that they are continuing the status as the Charitable Trust/Organisation, as they have been granted exemption in their assessments for the financial years 2014-15 and 2015-16 by the Income Tax authorities which is applicable to Charitable Trust registered under Section 12AA, as is evident from the intimation under Section 143(1) of the Income Tax Act issued by the Income Tax Department. Accordingly, I allow the appeal and set aside the impugned order."
4.7 The only objection which has been raised is to the word "building" used in the notification whereas appellant are claiming exemption in respect of shop and flats purchased by them from the M/s Yog Reality. In the impugned order and during the course of arguments learned authorized representative has sought to distinguish the decisions of Asha Murarka & Others {Manu/WB/0282/2015 and in the case of Notified Area Committee Nangal Township [MANU/SC/0991/1999 from the facts of following case and have argued that as per this decision a flat in a building should be construed as separate unit. A flat is in building. Multi storey buildings are divided into flats or units.
4.7 In the case of Notified Area Committee Nangal Township [AIR 1999 SC 2569] Hon'ble Apex Court has held as follows:
25 ST/85279/2021 "We do not think that the Committee is right in its approach. If we may refer to the definition of the 'building', it means any house used for the purpose of human habilitation. The term 'house' in the present case would mean a dwelling house intended for human habilitation. It is not disputed that each quarter or bungalow is allotted to a separate employee who lives therein with his family. Simply because some quarters or some bungalows have common wall separating each other would not mean that that quarter or bungalow ceases to be a house. A house is a place of dwelling or habilitation. It is difficult to accept the proposition that quarters in one row having common wall though each separating the other would mean one building for the purpose of arriving at the annual value. We do not think that any argument is needed for us to hold that each such quarter or bungalow for the residence of employees of the Board would fall within the definition of 'building'. Stand of the Committee appears to us is rather incongruous. Just to get more revenue, the Committee could not change its stand and put interpretation on the term 'building' which is incomprehensible. The Committee was not justified in clubbing all the quarters/bungalows in one block together and term that as 'building'."
4.8 After taking note of this decision, Hon'ble High Court of Rajasthan has in the case of Bharat Petroleum Corporation [RLW 2008 (1) Raj 439] held as follows:
"18. More than hundred years ago, Earl of Halsbury L.C. stated in the case of Grant v. Langston that the word "house" has acquired an artificial meaning. The word is no longer the expression of a simple idea; but to ascertain its meaning one must understand the subject matter with respect to which it is used in order to arrive at the sense in which it is employed in a statute. Each flat in a multi-storied building is a separate occupation and is a separate place of dwelling and habitation with the separate entry.
19. Seen thus, it is difficult to uphold the contention of State that group of flats in a multi-storied building owned by one person constitute one 'building' within the meaning of Section 2(3). For all legal and ordinary purposes, each separate flat in a multi-storied building would constitute a separate 26 ST/85279/2021 house or for that matter a separate building under Section 2(3) since each of such flat is separate and. there is no nexus with the flat above or below or side by side. There is no common functionality as such."
4.9 Hon'ble Supreme Court has in case of The Indian Oil Corporation Ltd. [1991 Supp (2) SCC 18] referred to various dictionary meaning of the word "building" and has observed as follows:
"9. In Blacks Law dictionary, Fifth Edition, the word 'building' has been defined thus:
Structure designed for habitation, shelter, storage, trade, manufacture, religion, business, education and the like. A structure or edifice enclosing a space within its walls and usually, but not necessarily, covered with a roof.
10. In Webster Comprehensive Dictionary, International Edition, 'building' has been defined thus:
An edifice for any use; that which is built, as a dwelling house, barn, etc. (2) The occupation, business or art of constructing. (3) The act or process of erecting or establishing.
11. Building has been defined in Stroud's Judicial Dictionary, fourth Edition at 334. What is a 'building' must always be a question of degree and circumstances; its "ordinary and usual meaning is, a block of brick or stone work, covered in by a roof". The ordinary and natural meaning of the word 'building' includes the fabric and the ground on which it stands.
12. In the Oxford English Dictionary the word 'building' has been defined to mean, "that which is built, structure, edifice, structure of the nature of a house built where it is to stand". In D.C. Gouse & Co. etc. v. State of Kerala and Anr. etc. . In the context of Entry 49, List Ii of VII schedule to the Constitution (Taxes on lands and buildings) under the Kerala Buildings Act, 1975, this Court held that the word 'building' means "that which is built; a structure edifice". The natural or ordinary meaning of a building is, "a fabric of which it is composed, the ground upon which its walls stand and the ground embraced within those walls". Under the inclusive definition of that Act it was held that a house, out- house, garage or any other structure cannot be erected without 27 ST/85279/2021 the ground on which it is to stand. The expression 'building' includes the fabric of which it is composed, the ground upon which its walls stand and the ground within those walls because the ground would not have a separate existence, apart from the building.
13. Thus it is clear that a tank to be a building must be a structure designed for either habitation or shelter for human habitation or storage of inanimate objects in storehouse or stable for horses shed or a hut etc. within the four corners of the walls built with masonary or otherwise with ingress or egress. The word building must be given its ordinary natural meaning ascribable to it including the fabric and the ground on which it stands. On a mere look at the tank, by no stretch of imagination, it could be said to be a building."
4.10 In view of the decisions as above we are of the view the word "building" used in entry at Sl No 13 (c) of the Notification No 25/2012-ST is wide enough cover the shop and flats purchased by the appellant in the project being developed by the M/s Yog Reality. That being so benefit of exemption under the said entry cannot be denied to the appellant on this ground.
4.11 Authorized representative has raise the issue of unjust enrichment. However he has failed to specify how the same can be applied in the present case where the claimant is recipient of the services and the consumer of service.
4.12. Thus we do not find any merits in the impugned order on the grounds challenged in this appeal.
5.1 Appeal is allowed.
(Order pronounced in the open court) (Sanjiv Srivastava) Member (Technical) (Dr. Suvendu Kumar Pati) Member (Judicial) tvu