2013 (7) TMI 590 - AT - Service Tax

Refund claim assessee claimed that as per Section 26(e) of SEZ Act r.w. Rule 31 of SEZ Rule, no service tax is leviable in relation to authorized operations in SEZ - under Notification 4/2004 services provided by service provider consumed in SEZ by a Developer or units are exempt from Service Tax - Notification 9/2009 prescribes certain conditions to be fulfilled for claiming the refund - there was no evidence on record about fulfillment of these conditions court did not accept the contention of the assessee - appellant did not claim refund under Notification 9/2009 as evident from refund application. Limitaition of time barred - no refund procedure is prescribed in Notification 4/2004 - assessee can file a refund claim u/s 11B of Central Excise Act - refund is filed after one year thus the claim is clearly time barred - which is made applicable to Service Tax by virtue of Section 83 claim of the appellants is required to be examined under provision of Section 11B of the Act appeal decided against assessee.

Issues:
1. Refund claim under SEZ Act 2005 and SEZ Rule 2006.
2. Eligibility for refund under Section 11B of Central Excise Act.
3. Time bar for filing refund claim.
4. Unjust enrichment.
5. Refund for services consumed outside SEZ.
6. Refund as a service recipient under Notification 9/2009.

Refund claim under SEZ Act 2005 and SEZ Rule 2006:
The appeal was filed by M/s Mahindra World City (Jaipur) against the Order in Appeal rejecting their refund claim under Section 26(e) of SEZ Act 2005 read with Rule 31 of SEZ Rule 2006. The original authority rejected the refund claim stating that the refund could only be filed by the person who paid the service tax, not the service recipient. The appellants challenged this decision in the present appeal.

Eligibility for refund under Section 11B of Central Excise Act:
The Tribunal found that the refund application was filed for the period May 2007 to March 2009 on 26.08.2009. The appellants claimed refund due to ambiguity in Notification 4/2004, stating they paid service tax which was not payable. The Tribunal noted that services consumed in SEZ by a Developer or units are exempt from Service Tax under Notification 4/2004. As no refund procedure was prescribed in the notification, the appellants could file a refund claim under Section 11B of Central Excise Act. However, since the claim was filed after 26.08.2008, it was time-barred as per Section 11B of the Act.

Time bar for filing refund claim:
The Tribunal upheld the finding of the Commissioner (Appeal) that the refund claim was time-barred as it was filed after the relevant date. The relevant date for filing a refund claim under Section 11B of the CEA is within one year from the date of payment of service tax or purchase.

Unjust enrichment:
The Tribunal noted that under Section 11B (2) (e) of the CEA, a service recipient can get a refund if the service tax is borne by them and they have not passed on the incidence of the tax to any other person. The original authority found that the appellants did not provide evidence to prove that the tax incidence was not passed on, making them ineligible for a refund under Section 11B (2) (e) on the grounds of unjust enrichment.

Refund for services consumed outside SEZ:
The Tribunal affirmed the decision of the Commissioner (Appeal) that there is no exemption for services consumed outside the SEZ under Notification 4/2004, hence no question of refund arises in such cases.

Refund as a service recipient under Notification 9/2009:
The appellants claimed that refund for the period 04.03.2009 to 31.03.2009 was admissible to them as a service recipient under Notification 9/2009. However, the Tribunal found that the appellants did not claim refund under Notification 9/2009 in their application and failed to provide evidence of fulfilling the conditions prescribed under the notification. Therefore, the Tribunal rejected this contention and dismissed the appeal filed by the appellants.

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