2019 (7) TMI 724 - AT - Service Tax

Refund of CENVAT Credit - receipt of services in the premises which are not registered - Some of the unit of appellant were not registered - N/N. 9/2009-ST dated 3.3.2009 - period January 2011 to March 2011 - HELD THAT - It is nowhere disputed by any of the authorities below that all the units are part of the same premises/SEZ unit operating in the said SEZ area and that the service are wholly consumed for the authorised operations. It is also not disputed that the appellant has paid the service tax as well as availed the input services. The invoices shows the payment of service tax on such services - I have been informed that the same have been approved by the Development Commissioner vide letter dated 9.9.2009 and 6.11.2009 respectively. I have also been informed that there is no provision in the online application form to mention all the premises. The rejection of refund claim on the ground of non-registration had come up before a co-ordinate Bench of the Tribunal in the matter of COMMISSIONER OF SERVICE TAX CHENNAI-II VERSUS SCIOINSPIRE CONSULTING SERVICES (INDIA) PVT. LTD. 2016 (10) TMI 41 - CESTAT CHENNAI in which the Tribunal while relying upon the decision of the Hon ble Karnataka High Court in the matter of MPORTAL INDIA WIRELESS SOLUTIONS (P.) LTD. VERSUS COMMISSIONER OF SERVICE TAX 2011 (9) TMI 450 - KARNATAKA HIGH COURT answered the issue in favour of the assessee. Time and again it has been repeatedly held by the Tribunal that no service tax can be levied on services provided to units situated in SEZ nothwithstanding anything contained in any notification. A combined reading of Section 51 of the SEZ Act read with Section 26 (1) ibid would clearly show that the services in the SEZ shall be exempted from payment of service tax - In my view in the absence of a statutory provision which prescribes that registration is mandatory the claim of the Appellant cannot be rejected. It is settled law that any beneficial provision should be interpreted liberally and for a mere procedural lapse substantive benefit cannot be denied to the Assessee - Since in the instant matter it is only a procedural lapse therefore the same can be condoned. Appeal allowed - decided in favor of appellant.

Summary

Issues:

1. Denial of refund of Cenvat Credit due to lack of centralized registration for all units in SEZ.
2. Interpretation of rules regarding registration requirement for claiming Cenvat credit.
3. Applicability of service tax on services provided to units in SEZ.
4. Procedural lapses in mentioning registered premises on invoices.

Issue 1: Denial of refund of Cenvat Credit:
The Appellant filed an Appeal against the order denying refund of Cenvat Credit based on the grounds of lack of centralized registration for all units in the SEZ. The dispute arose as the refund claim was partially rejected by the adjudicating authority due to non-registration of certain units within the SEZ. The Commissioner upheld the rejection, leading to the present Appeal.

Issue 2: Interpretation of Registration Requirement:
The key contention revolved around the interpretation of the registration requirement for claiming Cenvat credit. The Appellant argued that all units were part of the same premises/SEZ unit and that services were wholly consumed for authorized operations. The Appellant highlighted that there was no provision in the online application form to mention all premises, leading to the non-registration of certain units. The Appellant relied on a High Court decision emphasizing that the absence of a statutory provision mandating registration for claiming Cenvat credit rendered the rejection of the refund claim unjustified.

Issue 3: Applicability of Service Tax in SEZ:
The Tribunal analyzed precedents and legal provisions to determine the applicability of service tax on services provided to units situated in SEZ. It was noted that services in the SEZ are exempted from payment of service tax as per relevant sections of the SEZ Act. The Tribunal emphasized that no service tax can be levied on services provided to units in SEZ, irrespective of any notification.

Issue 4: Procedural Lapses in Invoices:
The Tribunal addressed the procedural lapses in mentioning registered premises on invoices. It was highlighted that the non-mentioning of registered premises on invoices was considered a procedural lapse, and substantive benefits should not be denied to the Assessee for such lapses. The Tribunal cited a recent decision where a similar issue was decided in favor of the assessee, emphasizing that procedural lapses should not hinder the rightful claims of the Appellant.

In conclusion, the Tribunal set aside the order of the Commissioner and allowed the Appeal filed by the Appellant, granting consequential relief. The judgment underscored the importance of interpreting beneficial provisions liberally and condoning procedural lapses to ensure substantive benefits to the Assessee.