2019 (8) TMI 562 - AT - Service Tax

Refund of service tax paid - time limitation - N/N. 12/2013-ST dated 01.07.2013 - refund rejected on the ground that the input services are commonly used for both SEZ and DTA operations - rejection also on the ground that claimant has not obtained prior approval of the said services - rejection also on the ground that payment towards the service received has not been made to respective service provider by the claimant, as required under Para 3(III)(d) of Notification No. 12/2013-ST dated 01.7.2013 - HELD THAT - The appellant has submitted that in their own case for the period January to March 2015, Deputy Commissioner, Mangalore has allowed the refund claim on identical facts and the same has not been challenged by the Revenue and has attained finality. The appellant does not have any DTA unit, they are only making supply to a DTA unit whereas the conditions of Para 3(III)(a) would be applicable only when the assessee has units in both SEZ and DTA whereas in the present case, the appellant has unit only in SEZ and make supply from SEZ to DTA unit and therefore the said condition of Para 3(III)(a) is not applicable in the present case - the denial of refund to the appellant is not sustainable in law. Rejection of refund on the ground of default list of services - HELD THAT - This issue is squarely covered in favour of the appellants in their own case by this Tribunal in MANGALORE SEZ LTD VERSUS COMMISSIONER OF CENTRAL TAX AND CENTRAL EXCISE, BELGAUM 2019 (7) TMI 211 - CESTAT BANGALORE - refund allowed. Rejection on the ground that payment towards the service received has not been made to respective service provider by the claimant, as required under Para 3(III)(d) of Notification No. 12/2013-ST dated 01.7.2013 - HELD THAT - The refund has been wrongly rejected on the ground that the said services are commonly used for SEZ and DTA operations - also the appellant does not have DTA, they have only made supply to a DTA unit and therefore there is no violation of the conditions of the Notification - the rejection of refund claim is wrong and not sustainable in law. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Eligibility of refund on input service alleged to be common for both SEZ and DTA unit
2. Eligibility of refund received prior to default list of service
3. Eligibility of refund for rent-a-cab service
4. Eligibility of refund for accommodation service

Analysis:

Issue 1: Eligibility of refund on input service
The appellant filed a refund claim for Service Tax paid towards specified services in SEZ. The claim was rejected due to common usage of services between SEZ and DTA, lack of prior approval for certain services, and non-payment to service providers. The appellant argued that the conditions of Notification No. 12/2013-ST were misinterpreted, citing a previous decision in their favor. The Tribunal found that the appellant did not have a DTA unit and only supplied to one, thus the conditions did not apply. Refund allowed based on Adani Powers Ltd. case.

Issue 2: Eligibility of refund received prior to default list
The Tribunal referred to a previous order in the appellant's favor on identical facts, allowing the refund. The AR argued against the refund based on strict interpretation of Notification No. 12/2013-ST. The Tribunal upheld the refund, stating that denial based on a procedural lapse was not sustainable.

Issue 3: Eligibility of refund for rent-a-cab service
The rejection of refund for rent-a-cab service was challenged by the appellant, arguing that as they did not have a DTA unit, the common usage finding was incorrect. The Tribunal agreed with the appellant, holding that the rejection was not sustainable in law.

Issue 4: Eligibility of refund for accommodation service
Similar to the rent-a-cab service, the rejection of refund for accommodation service was disputed by the appellant. The Tribunal found in favor of the appellant, stating that since they only supplied to a DTA unit and did not have one themselves, the rejection was unjustified.

In conclusion, the Tribunal found the impugned order unsustainable in law and allowed the appeal of the appellant, providing consequential relief. The judgment was delivered on 08/08/2019 by S.S Garg, Judicial Member of Appellate Tribunal CESTAT Bangalore.