2016 (7) TMI 235 - AT - Service Tax

Claim of refund - refund claim was not accompanied by Form A-1 as provided in Notification No-17/2011 ST dated 01-03-2011 - service tax paid on purchase of software license meant for the authorized operations in their SEZ unit - Held that - The appellant has DTA operation also and if they file such declaration it would be a false declaration. The contention of the appellant that they are not required to file Form A-1 declaration as per the notification and that they may not be forced to file a declaration which is not applicable to them is not without force . The conditions mentioned in clause (f) (i) and (h) of the notification goes to show that Form A-1 is not to be furnished invariably in all refund application. It has to be furnished wherever applicable i.e when the applicant is carrying exclusively SEZ operations. The finding in the impugned order that appellant has to furnish Form A-1 is not legal or proper. This finding in the impugned order is set aside. - the appeal is allowed by way of remand with the findings made in regard to the requirement to file Form A-1. - Decided in favor of assessee.

Summary

Issues involved: Refund claim denial based on Form A-1 requirement, violation of natural justice in passing the original order, interpretation of Notification No.17/2011 ST regarding Form A-1 declaration, necessity of Form A-1 for SEZ operations, remand order by Commissioner (Appeals) for re-examination of refund claim.

Analysis:

The appellant, engaged in IT Software Services with SEZ and DTA operations, filed a refund claim for service tax paid on software license. A show cause notice was issued proposing denial due to lack of Form A-1. The original order was passed before considering the appellant's reply, leading to a violation of natural justice. The Commissioner (Appeals) remanded the matter, emphasizing re-examination considering the appellant's documents and reply.

The crux of the issue lies in whether the appellant is required to furnish a Form A-1 declaration as per Notification No.17/2011 ST. The Commissioner (Appeals) discussed this requirement extensively, rejecting the appellant's contention and advising them to submit the declaration. The appellant, carrying out both SEZ and DTA operations, argued against the necessity of Form A-1, citing the specific conditions of the notification.

The notification mandates Form A-1 for SEZ units exclusively carrying out SEZ operations. The appellant's contention that filing such a declaration would be false due to their DTA operations holds weight. The clarity of the notification's language, supported by related clauses, confirms that Form A-1 is required only in specific cases of exclusive SEZ operations.

The judgment concludes that the finding mandating the appellant to furnish Form A-1 is legally unsound and sets it aside. Despite the remand order, the adjudicating authority failed to re-examine the claim, prompting a remand to ensure a fair opportunity for the appellant to present their case. The appeal is allowed for remand, emphasizing the observations on the Form A-1 requirement.

In essence, the judgment clarifies the nuanced interpretation of Form A-1 necessity under the notification, highlighting the importance of adhering to specific conditions for refund claims in SEZ operations while ensuring procedural fairness and compliance with natural justice principles.