2017 (12) TMI 1028 - AT - Service Tax

Refund claim - input services consumed within SEZ - telephone services - internet services - maintenance and repair services - denial on the ground of non-inclusion of the specified service category in the approval list of service required for authorised operation - Held that - the adjudicating authority has not disputed the fact of receipt of these services in the SEZ unit and the same are consumed by the appellant unit - non-inclusion of the services in the list of services approved by the Development Commissioner for authorised operations is just a procedural lapse which cannot be considered as a ground for rejection of refund claim - refund allowed - appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claims rejection for input services wholly consumed within SEZ.

Analysis:
The assessee filed refund claims for input services consumed within the SEZ, which were rejected by the Commissioner(Appeals). The appellant argued that services provided to a unit in the SEZ are deemed as export under SEZ Act, 2005, and SEZ Rules, 2006. The Notification No.9/2009 exempted taxable services for authorized SEZ operations. The appellant contended that services like travel, air freight, banking, professional fees are indirectly used for authorized operations. The rejection was based on services being fully consumed within the SEZ unit.

The Appellate Tribunal considered the submissions and found that the services were received and consumed by the appellant unit within the SEZ, consistent with the Zydus Hospira Oncology Pvt. Ltd. case decision. The non-inclusion of services in the approved list by the Development Commissioner was viewed as a procedural lapse, not a valid ground for rejection. Relying on the precedent and the facts presented, the impugned orders were deemed unsustainable, and the appeals of the appellant were allowed with consequential reliefs.

The Tribunal's decision highlighted that the receipt and consumption of services within the SEZ, coupled with the legal provisions under the SEZ Act and relevant notifications, supported the appellant's claim for refund. The judgment emphasized the importance of considering the nature of services and their connection to authorized operations within the SEZ, rather than procedural technicalities in approving service categories. The reliance on a previous case decision further strengthened the appellant's position, leading to the setting aside of the Commissioner(Appeals) orders and granting relief to the appellant.