2013 (7) TMI 703 - AT - Service Tax

Taxable service to SEZ unit refund rejected - refund claimed by the assessee as the recipient of the taxable service of Architect Interior Decorator and Consulting Engineer services provided - Held that - Rejection of the assessee s claim was unsustainable - Notification No. 9/2009-ST enable claim of exemption by developers or units in SEZ by way of refund of service tax paid for services used in relation to authorized operations in SEZ - insofar as the claim for refund is filed within six months or within such extended period as the AC or DC of Central Excise shall permit - provisions of the 2005 Act are provided an overriding effect vide Section 51 - the immunity to service tax in respect of taxable services provided in relation to SEZ is a legislatively enjoined immunity - any service tax paid/ remitted by a service provider is liable to be refunded to the provider who has remitted service tax in relation to taxable services provided to the unit to carry on authorized operations in a SEZ order set aside appeal decided in favour of assessee.

Summary

Issues involved:
Refund claim under Notification No. 15/2009-ST for services consumed within SEZ.

Detailed Analysis:

1. Refund Claim and Notification No. 15/2009-ST:
The appellant, a SEZ unit, claimed a refund of Rs. 1,30,410 under Notification No. 15/2009-ST for service tax remitted in relation to various services consumed within the SEZ. The dispute arose when the adjudicating authority rejected the refund claim to the extent of Rs. 56,650 for services like Architect, Interior Decorators, and Consulting Engineer, consumed within the SEZ. The authority held that these services were wholly consumed within the SEZ and thus fell beyond the scope of the notification.

2. Appellate Proceedings:
The appellant appealed against the rejection of the refund claim, arguing that the services provided by M/s. Venkataramanan Associates should be eligible for the refund under the notification. The Commissioner (Appeals) upheld the adjudicating authority's decision, citing interpretations of relevant legal provisions and Acts related to Architect services and SEZ regulations. However, the Appellate Tribunal found that the rejection of the claim for services consumed within the SEZ was unsustainable.

3. Legislative Provisions and Immunity to Service Tax:
The Tribunal analyzed the legislative framework, including the SEZ Act, 2005, and relevant notifications like No. 9/2009-ST and No. 15/2009-ST. It highlighted that the SEZ Act provides immunity from taxes and duties for services provided within SEZs. The Tribunal emphasized that the notifications merely operationalize the process of claiming refunds for taxable services consumed within SEZs, without disentitling the immunity provided by the SEZ Act.

4. Conclusion and Decision:
Based on the comprehensive analysis of the legal provisions and notifications, the Tribunal declared the rejection of the refund claim for services consumed within the SEZ as unsustainable. The order of the Commissioner (Appeals) was set aside, and the appellant was deemed entitled to a refund of Rs. 56,650. The Tribunal clarified that the notifications facilitate the refund process for taxable services consumed within SEZs without affecting the overarching immunity provided by the SEZ Act.

In conclusion, the judgment highlighted the interplay between legislative provisions, notifications, and the immunity to service tax in SEZs, ultimately ruling in favor of the appellant's refund claim for services consumed within the SEZ.