2019 (1) TMI 1440 - AT - Service Tax

SEZ Unit - Refund of Service Tax - denial of refund on the ground that the conditions of the N/N. 12/2013 dt. 01/07/2013 not fulfilled and also appellant had failed to produce proper and valid documents justifying the refund claim - rejection also on the ground of time limitation - time limit for issuance of ISD Invoices - Non-speaking order - Held that - The impugned order is not a speaking order and has not considered all the documents along with relevant letters of approval submitted by the appellant. The said approval letters have also been placed on record which clearly covers all the services which have been used in or in relation to the authorized operations. Time limit for issuance of ISD Invoices - Held that - The ISD invoice issued towards distribution of credit is dt. 31/10/2015 and in the present case, the appellant has not made the payment to the registered service provider and there is no time limit prescribed for ISD invoices. Therefore the date of ISD invoice is the date for which time limit one year is to be accounted. But the same has not been done by both the authorities below - keeping in view the intention of the Government in enacting the SEZ and giving special fiscal concession to SEZ unit, it is concluded that this is only a procedural requirement and not a mandatory as held by the Commissioner (Appeals). The impugned order is set aside and case remanded back to the original authority to pass a de novo order after complying with the principles of natural justice and after affording an opportunity of hearing - appeal allowed by way of remand.

Summary

Issues:
Refund claim rejection under Notification No.12/2013-ST - SEZ unit - Provisions compliance - Documentation validity - Refund conditions fulfillment - SEZ Act overriding effect - Natural justice violation - Appellate Tribunal decision challenge.

Analysis:
The appeal was against the Commissioner(Appeals) order rejecting the appellant's refund claim under Notification No.12/2013-ST. The appellant, a SEZ unit, filed a refund claim for service tax paid on services received. Discrepancies led to rejection of a portion of the claim by the original authority. The Commissioner(Appeals) upheld this decision citing non-inclusion of services in approved lists, failure to prove timely service tax payment, and inadequate credit distribution evidence. The appellant challenged this decision on various grounds, including compliance with conditions, SEZ Act overriding effect, and natural justice principles violation.

The appellant argued that the impugned order lacked legal basis, failed to consider evidence, and violated natural justice principles. They contended that SEZ Act provisions exempt duties and taxes for SEZ units, emphasizing adherence to Notification No.12/2013 conditions. The appellant referenced relevant circulars and legal precedents to support their position. They stressed approval of services by Unit Approval Committee and proper credit distribution, challenging the rejection based on time limits and approval requirements.

After hearing both sides and reviewing the case, the Appellate Tribunal found the impugned order deficient. It noted the lack of a speaking order, inadequate consideration of submitted documents, and failure to account for approval letters covering authorized operations. Regarding time limits for ISD invoices, the Tribunal clarified the absence of a specified limit, making the invoice date the relevant time reference. The Tribunal emphasized the SEZ Act's overriding effect and the procedural nature of UAC approval, contrary to the Commissioner(Appeals) view. Considering these flaws, the Tribunal set aside the order and remanded the case for a fresh decision, emphasizing compliance with natural justice principles and SEZ Act provisions.

In conclusion, the Appellate Tribunal allowed the appeal by remanding the case to the original authority for a new decision, considering all relevant aspects, including the SEZ Act's overriding effect and the principles of natural justice.