2019 (9) TMI 1691 - AT - Service Tax

Refund of Service tax paid - various specified services used in or in relation to authorized operation in the SEZ - applicability of Notification No.9/2009-ST, dt.03.03.2009 as amended vide Notification No.15/2009-ST, dtd. 20.05.2009 - HELD THAT - The club or association service is initially not included in the approved list, but later forming a part of the approved list. Hence, refund cannot be denied to the Appellant in view of the judgment in the case of Biocon Ltd 2019 (2) TMI 873 - CESTAT BANGALORE . Similarly, since the service tax paid on life insurance service of the employees of the Appellant being included in the approved list, refund on this count cannot be denied to them in view of the judgment in the case of Tata Consultancy Services Ltd s case 2012 (8) TMI 500 - CESTAT, MUMBAI . Also, various input services which are wholly consumed within the SEZ, the service tax paid on such services cannot be denied as refund, in view of the principle of law laid down in the case of Barclays Ltd s case 2015 (2) TMI 146 - CESTAT MUMBAI . The impugned order being devoid of merit, is set aside - Appeal allowed.

Summary

Issues:
Entitlement to refund of service tax paid on various input services used in SEZ for authorized operation.

Analysis:
The appeal was filed against Order-in-Appeal rejecting a refund claim for service tax paid on specified services used in SEZ. The Adjudicating authority rejected a portion of the claimed amount. The Appellant, a SEZ unit manufacturing semiconductors, sought refund for the period March 2009 to July 2009. The rejected amount included service tax on Club or Association service, Life Insurance Service, and input services wholly consumed in the SEZ. The Chartered Accountant argued that subsequent approval of services cannot disentitle refund, citing relevant judgments. The Tribunal's precedent in similar cases supported the Appellant's claim for refund.

The Revenue, represented by the A.R., reiterated the findings of the Commissioner (Appeals). After hearing both sides and examining the records, the main issue was whether the Appellants were entitled to a refund of service tax paid on input services used for authorized operation in the SEZ. The Tribunal found that the Club or Association service, though initially not included in the approved list, later became part of it. Therefore, the refund could not be denied based on the Biocon Ltd judgment. Similarly, the service tax paid on employees' life insurance service, included in the approved list, could not be denied based on the Tata Consultancy Services Ltd's case. Regarding input services wholly consumed within the SEZ, the Tribunal relied on the principle established in the Barclays Ltd's case to rule that the service tax paid on such services was refundable.

Based on the precedent and legal principles, the Tribunal concluded that the impugned order lacked merit. Consequently, the order was set aside, and the appeal was allowed with any consequential relief as per law. The decision was pronounced in the open court, granting relief to the Appellant in line with the legal analysis and judgments referenced during the proceedings.