2015 (1) TMI 457 - AT - Service Tax

Denial of refund claim - developer of SEZ - Consulting Engineering and Business Auxiliary Service - notification No. 9/2009 dt. 3.3.2009 - Held that - Notification No. 9/2009 does not state that the list of services required in relation to authorized operations in the SEZ should be got approved from the approval committee before providing the services. The appellants have pointed out that they had filed the refund claim after the list was approved. Thus, the claim is in consonance with the requirement of notification. It is also noted that the SEZ Act, clearly provides under Section 50 (1) that it will have overriding effect over the provisions of any other law. As both the SEZ Act and Service Tax Act, have been passed by Parliament, the provisions of Section 51 have to be given effect to. The reliance placed on the DHL Logistic Pvt. Ltd. (2012 (6) TMI 458 - CESTAT, MUMBAI) by the A.R. relates to exemption notification No. 4/2004 which did not incorporate the refund mechanism. On the other hand, in the case of Intas Pharma Ltd. Vs. CST reported in 2013 (7) TMI 703 - CESTAT AHMEDABAD , it was held that provisions of SEZ Act have overriding effect. Therefore, there appears to be no reason to deny the refund claim. Notification No. 9/2009 does give the authority to the Assistant Commissioner law to collect extension for filing of refund claim. The appellants were registered in 2009; thereafter took various approvals under SEZ Act and this being their first refund application, the same was filed beyond the six months period. They also needed time to ensure that the service provider not taken refund. The Assistant Commissioner should have examined the issue in total perspective while exercising his power under this clause (2f) of para 2 of the notification. The appellants have been filing refund claims thereafter which are receiving sanction. It would not meet the ends of justice, if the refund claim is denied when no service tax is payable under the provisions of SEZ Act. - Decided in favour of assesse.

Summary

Issues Involved:
Appeal against rejection of refund claim under SEZ Act and Service Tax Act.

Analysis:
The appellants, a developer of SEZ, filed a refund claim under notification No. 9/2009 for services provided during a specific period. The appellant's main contentions were that Section 15 of the SEZ Act supersedes other laws, the refund claim filing did not require pre-approval of services, and they had valid reasons for the delay in filing. The appellant argued that service tax is not applicable to services provided to SEZ units under the SEZ Act, hence refund rejection should not stand.

The respondent contended that the list of services should have been approved before service receipt, and extension for filing refund should be granted only for genuine reasons. The respondent cited a CESTAT judgment to support the argument that SEZ provisions do not override Service Tax Act notifications.

The tribunal analyzed the submissions and found that the notification did not mandate pre-approval of services before provision. The SEZ Act's Section 50(1) states its overriding effect on other laws, including the Service Tax Act. Referring to precedents, the tribunal noted that SEZ Act provisions take precedence, and denial of refund without service tax liability would be unjust. The tribunal also addressed the issue of time bar, noting that the notification allowed for extension by the Assistant Commissioner, considering the appellant's circumstances and previous refund applications.

In conclusion, the tribunal allowed the appeal, emphasizing that denying the refund when service tax was not payable under the SEZ Act would not serve justice. The decision was made with consequential relief, if applicable.