2015 (3) TMI 1301 - AT - Service Tax

Refund of service tax paid on input services - denial on the ground that certain services were not used in authorised operations and certain services were wholly utilised within the SEZ - Tribunal s decision in the case of TATA CONSULTANCY SERVICES LTD Versus COMMISSIONER OF CENTRAL EXCISE & ST (LTU), MUMBAI 2012 (8) TMI 500 - CESTAT, MUMBAI referred - Held that - As regards utilisation in authorised operations, the Tribunal had observed that the Committee which gives approval has a representative of the Revenue also as a Member and having approved being part of the Committee, subsequently Revenue cannot take a stand that input services specified and approved have no nexus or they have not been used in authorised operations and to deny the refund - refund allowed. As regards the payment of service tax in respect of services utilised entirely within SEZ, the Tribunal took the view that even though the service receiver could have obtained the services without payment of tax, it does not bar him obtaining the services on payment of tax and claiming refund. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claims under Notification No.9/2009-ST rejected on grounds of certain services not used in authorised operations and some services wholly utilised within SEZ.

Analysis:
The appellant, an SEZ unit, filed refund claims for service tax paid on input services under specific notifications. The claims were rejected based on two grounds: non-use of certain services in authorised operations and complete utilisation of some services within the SEZ. The Revenue argued that there was no nexus between certain services and the manufactured goods. The appellant contended that the approval granted included both authorised operations and input services, and cited a Tribunal decision supporting their position. The learned counsel highlighted that obtaining input services without paying tax did not preclude claiming a refund for tax paid on such services. The Revenue agreed that the issues were covered by a Tribunal decision.

The Tribunal considered the submissions and referred to a previous case involving Tata Consultancy Services Ltd. where it was held that the appellant was eligible for a refund. Regarding utilisation in authorised operations, the Tribunal noted that the Committee approving the operations had a Revenue representative, implying approval of the services used. The Tribunal also stated that paying service tax for services wholly within the SEZ did not prevent the appellant from claiming a refund. Since the Tribunal's decision in the TCS case addressed both issues, the appeals were allowed, granting relief to the appellant as per the decision.

(Order pronounced and dictated in open court)