2018 (4) TMI 160 - AT - Service Tax

Refund of service tax - denial on the ground that the exemption from payment of service tax of services used in SEZ is allowed by way of refund to the service receiver situated in SEZ - whether the appellant are entitled to refund of service tax of ₹ 5,94,225/- paid during the period 03.03.2009 to 20.05.2009 in providing Repair & Maintenance Service to various units situated in SEZ? - Held that - There is no room for any intendment in the interpretation of the said exemption Notification, which has to be strictly interpreted. The only exception carried out in the said notification is that in the event the service provider and service receiver are one and the same person, the service provider could claim the refund of service tax paid on the specified services used in the SEZ. It is the receiver, who is entitled to refund and not the service provider - The claimant of refund is not the service receiver, but, the service provider, and not entitled for refund - rejection upheld - appeal dismissed - decided against Revenue.

Summary

Issues involved:
- Entitlement to refund of service tax paid for services provided in SEZ under Notification No. 9/2009-ST dated 03.03.2009.

Analysis:
1. The appellant provided Repair & Maintenance Service and Renting of Immovable Property Service to units in SEZ during a specific period and filed a refund claim for service tax paid on these services. The claim was rejected by the adjudicating authority and Ld. Commissioner (Appeals).

2. The appellant contended that since the services were consumed within the SEZ area, they were eligible for a refund under Notification No. 9/2009-ST dated 03.03.2009. They referred to relevant judgments supporting their claim.

3. The Revenue argued that the exemption for service tax payment in SEZ is for the service receiver, not the service provider. They mentioned the overruling of a previous judgment by a Larger bench of the Tribunal.

4. The main issue was whether the appellant was entitled to a refund of service tax paid for services provided in SEZ. The Tribunal noted that the exemption under the Notification is strictly interpreted and allows refund to the service receiver in SEZ, except when the service provider and receiver are the same entity.

5. The Tribunal examined the Notification's provisions, which clearly state that the exemption is for the service receiver in SEZ, not the service provider. Since the appellant was the service provider seeking a refund, the rejection of the claim was upheld by the Tribunal based on the interpretation of the Notification.

6. The Tribunal concluded that the appellant, as the service provider, was not entitled to the refund under the Notification. Therefore, the appeal was rejected, upholding the decision of the Ld. Commissioner (Appeals).

This detailed analysis covers the issues involved in the legal judgment regarding the entitlement to a refund of service tax paid for services provided in a Special Economic Zone under a specific Notification.