2021 (10) TMI 1439 - AT - Service Tax

Denial of refund of service tax - specified services received by SEZ units - refund of the service tax distributed by the ISD invoices rejected on the ground that these are not common services - HELD THAT - The ISD invoices have been issued by ISD distributor located elsewhere and Learned C.A. pointed out that independent returns are filed for the ISD. The record of ISD has also been audited by Revenue and no objection regarding this distribution has been raised. Regarding distribution or admissibility of these service by the ISD unit a challenge can only be made by the authorities supervising ISD unit. At the end of SEZ unit, the question of receipt or admissibility of these services cannot be raised. There are no merit in the order in appeal - The same is set aside and appeal is allowed.

Summary

Issues involved: Denial of refund of service tax u/s Notification 12/2013-ST dated 01.07.2013 to SEZ unit for common services received from ISD distributor.

Summary:
The appeal was filed by Rallis India Limited against the denial of refund of service tax under Notification 12/2013-ST dated 01.07.2013. The appellant, a unit in SEZ, is entitled to exemption by way of refund as per the notification. The notification provides exemption to services received by SEZ units, with the exemption granted through refund of service tax paid on specified services. The issue revolved around the distribution of common services received by the SEZ unit from an ISD distributor, with the Commissioner (Appeals) rejecting the refund on the grounds that these services were not common.

Shri Mathur, representing the appellant, highlighted that the service tax distribution records had been audited by the ISD without any objections raised. On the other hand, the Learned DR relied on the requirement in the notification for the appellant to demonstrate how the services were received and used for various operations by the SEZ unit.

Upon consideration, it was found that the core issue pertained to the refund of service tax from ISD invoices received by the appellant. The ISD invoices were issued by a distributor located elsewhere, and it was noted that independent returns were filed for the ISD, with no objections raised during audits. It was agreed with the appellant's representative that challenges to the distribution or admissibility of these services by the ISD unit should be addressed by the supervising authorities of the ISD unit. Therefore, the order denying the refund was deemed to lack merit, set aside, and the appeal was allowed.