2015 (12) TMI 882 - AT - Service Tax

Denial of refund claim - SEZ - Notification No. 9/2009-ST dated 03.03.2009 - services did not have nexus with the authorized operations - Held that - While rendering the decision in favour of the appellant in that case, the Tribunal had relied upon the decision in the case of Tata Consultancy Services Ltd. Vs. CCE (LTU), Mumbai 2012 (8) TMI 500 - CESTAT, MUMBAI . - In the case of Tata Consultancy Services the Tribunal had taken the view that once the Approval Committee which has the Commissioner of Customs also as a Member issues certificate that services received by the assessee are in relation to their authorized operations, subsequently a contradictory decision cannot be taken by the officers of Customs. As regards services wholly consumed within SEZ, even though there is no necessity to discharge service tax liability, it was held that this does not mean that in a case where service tax has been paid, assessee is not eligible for refund. - Decided in favour of assessee.

Summary

Issues:
Refund of service tax to SEZ unit under Notification No. 9/2009-ST, rejection of claims due to lack of nexus with authorized operations, rejection based on Notification No. 15/2009-ST, reliance on previous Tribunal decision, applicability of Tata Consultancy Services case.

Analysis:
The judgment pertains to the appeal of a SEZ unit seeking a refund of service tax paid on services used in authorized operations under Notification No. 9/2009-ST. The refund claims were rejected on the grounds that the services lacked nexus with the authorized operations, despite being on the approved services list by the Approval Committee. Additionally, some claims were dismissed citing Notification No. 15/2009-ST, which provides unconditional exemption for services wholly consumed within the SEZ. Services such as transportation of goods, courier service, rent-a-cab service, and port services were specifically mentioned as lacking nexus.

The Revenue, represented by the learned AR, reiterated their stance taken in the lower authorities' orders. However, the appellant's counsel argued that similar issues had been previously considered by the Tribunal in Final Order Nos. 20664-20665/2015, where the appeals were allowed for the same appellant, indicating a precedent for favorable decisions. The AR acknowledged the similarity of issues involved in both cases.

The Tribunal's decision in favor of the appellant was influenced by the precedent set in the case of Tata Consultancy Services Ltd. Vs. CCE (LTU), Mumbai, where it was established that once the Approval Committee certifies services as related to authorized operations, contradictory decisions by customs officers are not permissible. Furthermore, the Tribunal clarified that even for services wholly consumed within the SEZ, payment of service tax does not disqualify the assessee from claiming a refund.

Based on the precedent and reasoning provided in the Tata Consultancy Services case, the Tribunal allowed all appeals with consequential relief for the appellants, as the issues raised were deemed to be covered by the previous decision. The judgment signifies the importance of establishing a clear nexus between services claimed for refund and authorized operations within SEZ units, as well as the applicability of relevant notifications and precedents in determining refund eligibility.