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2020 (3) TMI 810 - AT - Service TaxClaim of refund - SEZ unit - Interpretation of statute - Notification No. 09/2009-ST and 17/2011-ST and various provisions of SEZ Act - Revenue is of the view that since the Respondent supplied the electricity generated in their power plant located in SEZ Mundra in DTA also they are not entitle for refund - HELD THAT - In the identical set of facts and also on the law point, this Tribunal in bunch of appeals filed by Revenue decided the issue in ADANI POWER LTD. VERSUS CST AHMEDABAD AND VICE-VERSA 2016 (3) TMI 231 - CESTAT AHMEDABAD wherein the Tribunal, after analyzing the relevant notifications, various provisions of SEZ Act and correspondence made with SEZ authorities and Ministry of Commerce and Industries, it was held that mere supply of surplus power in DTA as mentioned in Rule 47 of SEZ Rules, cannot be construed that the assessee carries on business, as there is no DTA Unit of the assessee. Apart from that, SEZ, Mundra, directed the assessee to claim refund in terms of Para 2(c) of the notification, then, rejection of refund claims considering under Para 2(d) of notification by the Adjudicating authority is totally unwarranted and cannot be sustained. Whether Commissioner (Appeals) has power to remand the matter to Adjudicating Authority? - HELD THAT - This being a case of refund of service tax, clearly covered by the ratio of Hon ble Gujarat High Court judgment in the case of COMMISSIONER OF SERVICE TAX VERSUS VERSUS ASSOCIATED HOTELS LIMITED 2014 (4) TMI 406 - GUJARAT HIGH COURT . In the said judgment, the Hon ble High Court has also referred to the judgments of Hon ble Supreme Court in the case of MIL INDIA LTD. VERSUS COMMISSIONER OF C. EX., NOIDA 2007 (3) TMI 8 - SUPREME COURT . Therefore, the learned Commissioner (Appeals) has power to remand the matter to the Adjudicating Authority, therefore, on this count also, Revenue s appeal does not sustain. Appeal dismissed - decided against Revenue.
Issues Involved:
1. Entitlement of SEZ developers to refund of service tax under Notification No. 09/2009-ST and Notification No. 17/2011-ST. 2. Whether services received by the Respondent were wholly consumed within the SEZ. 3. Commissioner (Appeals)' power to remand the matter to the Adjudicating Authority. 4. Specific grounds for rejection of refund claims by the Adjudicating Authority. Detailed Analysis: 1. Entitlement of SEZ Developers to Refund of Service Tax: The central issue in the appeals was whether the Respondent, being SEZ developers in the power sector, were entitled to a refund of service tax under Notification No. 09/2009-ST and Notification No. 17/2011-ST. The Adjudicating Authority had denied the refund on the grounds that the electricity generated was supplied outside the SEZ to the Domestic Tariff Area (DTA), thus violating the condition that services must be wholly consumed within the SEZ. However, the Commissioner (Appeals) allowed the refund claims, leading to the present appeals by the Revenue. 2. Whether Services Were Wholly Consumed Within the SEZ: The Revenue argued that since the electricity generated in the SEZ was supplied to the DTA, the services were not wholly consumed within the SEZ, making the Respondent ineligible for the refund. The Tribunal referred to a previous order (No. A/10147-10187/2016) which had addressed similar facts and issues, concluding that the Respondent fulfilled the conditions of the notifications. It was noted that the Respondent did not avail Cenvat credit on goods used for transmission outside the SEZ and that surplus power could be transferred to the DTA as per Rule 47 of the SEZ Rules, 2006. The Tribunal found no merit in the Revenue's argument that the services were not wholly consumed within the SEZ. 3. Commissioner (Appeals)' Power to Remand the Matter: The Revenue also contended that the Commissioner (Appeals) lacked the power to remand the matter to the Adjudicating Authority. The Tribunal, however, upheld the Commissioner (Appeals)' power to remand, citing the Gujarat High Court's decision in the case of Commissioner of Service Tax vs. Associated Hotels Limited, which confirmed that the Commissioner (Appeals) has the authority to remand cases for de novo adjudication. 4. Specific Grounds for Rejection of Refund Claims: The Commissioner (Appeals) had rejected certain refund claims on specific grounds, including: - Services provided by M/s. Karnavati Aviation Pvt. Ltd. not covered under the approved service category. - Reimbursement of expenses. - Services not consumed in relation to authorized operations. - Lack of supporting documents or co-relation with submitted documents. - Documents not specified under Rule 4A of Service Tax Rules. - Wrong classification of services by APL. - Services not approved at the time of refund claim but approved later. - Non-approved service categories. The Tribunal noted that the Commissioner (Appeals) had already remanded some portions of the refund for verification and directed the Adjudicating Authority to examine these issues on merit during de novo adjudication. Conclusion: The Tribunal upheld the orders of the Commissioner (Appeals), confirming the entitlement of the Respondent to the refund of service tax and the power of the Commissioner (Appeals) to remand the matter. The Tribunal dismissed the appeals filed by the Revenue, including one appeal on the grounds of monetary limits as per the Government's Litigation Policy. The judgment was pronounced in the open court on 18.03.2020.
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