2018 (6) TMI 1080 - AT - Service Tax

SEZ unit - Refund of Service Tax paid - denial of refund on the ground that service of mediclaim was not covered by the approved list of services - Held that - The general insurance term clearly covers the mediclaim. It is also observed that the appellant being a SEZ unit their input services otherwise not taxable and the output service being 100% exported no service tax is payable - If at all the appellant does not claim the refund under N/N. 12/2013-ST the appellant will be entitled for the refund under Rule 5 of the CCR 2004. Even if there is some discrepancy in declaring the input service in the letters of approval, so long as taxpaid input services were received and used in the SEZ unit, the refund should be allowed and only because of procedural lapse refund cannot be rejected. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim denial based on eligibility for mediclaim under general insurance services.

Analysis:
The appellant filed a refund claim for service tax paid on input services used for authorized operations. The respondent rejected a portion of the claim stating mediclaim service was not covered by approved services list. The Commissioner (Appeals) upheld this decision. The appellant argued that general insurance declared covers mediclaim as per approval letters. They claimed entitlement to refund under CENVAT Credit Rules, 2004, as a SEZ unit. The appellant cited a relevant tribunal judgment. The respondent reiterated the impugned order findings.

The Member (Judicial) analyzed the submissions. It was undisputed that general insurance included mediclaim under the policy. As a SEZ unit, the appellant's input services were non-taxable, and as 100% of output services were exported, no service tax was due. The Member agreed that any procedural lapses in declaring input services should not lead to refund denial if tax-paid services were used. The Member set aside the impugned order, allowing the appeal.

In conclusion, the Tribunal found in favor of the appellant, ruling that the denial of the refund claim for mediclaim under general insurance services was not justified. The appellant's entitlement to refund under CENVAT Credit Rules, 2004, as a SEZ unit was upheld, emphasizing that procedural lapses should not hinder legitimate refund claims based on actual utilization of tax-paid services.