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2019 (3) TMI 116 - AT - Service TaxRefund of service tax paid - SEZ Unit - specified input services used for the services exported - N/N. 12/2013-ST dated 1.7.2013 - fiscal concessions to SEZ - Held that - This Tribunal has consistently held that the benefit under the SEZ Act shall have an overriding effect as long as the input services are consumed within the SEZ and refund has to be sanctioned in favour of the assessee. Issue decided in appellant own case LOWE S SERVICES INDIA PVT. LTD. VERSUS COMMISSIONER OF CENTRAL TAX, BANGALORE NORTH 2019 (1) TMI 180 - CESTAT BANGALORE , where it was held that The appellant is a SEZ unit and as per Section 26 read with Rule 31 of SEZ Rules 2006 along with Section 51 of SEZ Act, the SEZ Act has overriding impact over other laws and SEZ units are exempt from payment of service tax for any service which is used for their authorized operations. Rejection of refund claim to the extent of ₹ 17,723/- paid under Reverse Charge Mechanism - Held that - Rejection is wrong because the appellant in all has paid service tax amounting to ₹ 43,012/- and out of the total amount of ₹ 43,012/-, a sum of ₹ 25,190/- was granted to the appellant and the balance of ₹ 17,723/- which was paid through the same challan was rejected.
Issues:
Refund claims under Notification No.12/2013-ST dated 1.7.2013 for service tax paid on input services used for exported services; Interpretation of SEZ Act provisions and overriding effect over other laws; Rejection of refund claims by Commissioner (A) partially; Legal sustainability of impugned order; Benefit of SEZ Act and judicial precedents; Procedural lapses in refund rejection; Dispute over service tax payment under Reverse Charge Mechanism. Analysis: The appellants filed four appeals against an order by the Commissioner (A) partially allowing and partly rejecting refund claims under Notification No.12/2013-ST for service tax paid on input services used for exported services. The appellants, registered with the Service Tax Department for providing Business Support and IT Software Services, are also a registered SEZ unit. The Deputy/Assistant Commissioner partially sanctioned the refund claims, which was partly upheld and partly rejected by the Commissioner (A). The appellant contended that the impugned order overlooked the SEZ Act's intention and the binding judicial precedent, arguing that SEZ units are exempt from service tax payment under Section 26 of the SEZ Act, 2005. Citing various court decisions, the appellant emphasized the overriding effect of the SEZ Act and the entitlement to refunds if input services are consumed within the SEZ. The appellant also argued that procedural requirements cannot negate the immunity provided by the SEZ Act, relying on legal precedents. In the appellant's own case, the Tribunal held that SEZ Act's intention is to exempt SEZ units from service tax for services used in authorized operations. The Tribunal further noted that rejection of refund claims based on procedural lapses or non-inclusion of services approved by the Development Commissioner is not legally permissible. The rejection of refund claims under Reverse Charge Mechanism was deemed incorrect as the appellant had paid the service tax, and the rejection was unfounded. By following established legal principles and precedents, the Tribunal allowed all appeals, providing consequential reliefs as necessary. The Tribunal's decision, pronounced on 28.02.2019, highlighted the consistent application of SEZ Act provisions and the overriding effect on other laws in granting refunds to SEZ units for service tax paid on input services used for authorized operations within the SEZ. The judgment underscored the importance of adhering to legal principles and precedents in determining the validity of refund claims and emphasized the procedural aspect as secondary to the SEZ Act's overarching provisions. The Tribunal's analysis reaffirmed the entitlement of SEZ units to refunds and set aside the Commissioner (A)'s decision, granting relief to the appellants in all four appeals.
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