2016 (11) TMI 834 - AT - Service Tax

SEZ unit - export of services - refund of tax - exemption of the Service Tax as per N/N. 09/2009-ST dated 03.03.2009 - time bar - Held that - the refund claims of the appellant cannot be rejected for reason that services are wholly consumed within SEZ and they are time barred having been filed beyond the period of six months. It is seen from records of all these cases, refund claims are filed within six months or within a period of one year and the amount of the refund which had been sought the appellant is an amount paid by the service provider and appellant having borne the incidence is eligible to the refund claim. As regards the various discrepancies as noted in the refund claims like no proper invoice, service of hiring of air craft and air transport services not approved by approval committee, registration no. not mentioned on invoices, invoice in the name of other unit, incorrect amount, depreciation allowance, allocation of rent and electricity, bill not produced for verification; we find these things need to be factually verified by the adjudicating authority. In view of this, the refund claim to the extent indicated herein above, we remand the mater back to the adjudicating authority to arrive a conclusion after consideration of the various records that may be produced by the appellant. Appeal allowed - matter remanded.

Summary

Issues:
Rejection of refund claim of Service Tax paid by the service provider; Dispute over whether Service Tax liability can be refunded if services are consumed within SEZ; Rejection of refund claims based on time limitations.

Analysis:
The judgment addresses multiple appeals against Orders-in-Appeal passed by the Commissioner of Central Excise (Appeals), Pune-III. The central issue in all appeals is the rejection of refund claims for Service Tax paid by the service provider, as the appellant, an exporter of services in SEZ area, sought refunds for services consumed within SEZ. The Revenue contended that since the service provider was exempt from Service Tax, the appellant could not claim refunds. Additionally, the Revenue rejected claims for being beyond the time limit of six months post-service export. The appellant argued that the rejection was primarily due to services consumed within SEZ. The Tribunal considered these arguments and relevant precedents.

The Tribunal found that the rejection of refund claims solely based on services consumed within SEZ and being time-barred was not in line with legal provisions. Referring to a specific case law, the Tribunal clarified that even if services were fully exempt from duty, the appellant could still claim refunds under relevant provisions. The Tribunal emphasized that the appellant, having borne the tax burden, was eligible for refunds regardless of the service provider's exemption status. The Tribunal highlighted the policy objective of not burdening exports with taxes and emphasized the broader interpretation of refund provisions to support this objective.

Based on the legal analysis and precedents cited, the Tribunal concluded that the appellant's refund claims could not be rejected solely on grounds of services being consumed within SEZ or exceeding the time limit. The Tribunal noted discrepancies in the refund claims, such as improper invoices and unapproved services, which required factual verification by the adjudicating authority. Consequently, the Tribunal partially allowed the appeal by remanding the matter back to the adjudicating authority for further consideration based on the evidence presented by the appellant.

In the final order, the Tribunal allowed the appeal partly through remand, emphasizing the need for a comprehensive review of the refund claims considering the legal principles discussed in the judgment.