2021 (3) TMI 230 - AT - Service Tax

Refund of Service tax paid - SEZ unit - input service or not - Group Health Insurance Service - Group Medical Insurance Service - Group Personal Accident Insurance Service - services are used for providing various authorized operations in the appellant company - Department entertained the view that the appellants are not entitled to the refund of service tax paid on the specified services on the ground that those services are not falling under the default list of services approved by the Development Commissioner - HELD THAT - The Hon ble Apex Court in the case of Toyo Engineering India Ltd. 2006 (8) TMI 184 - SUPREME COURT and also in the case of Commissioner of Central Excise V. Gas Authority of India Ltd. 2007 (11) TMI 276 - SUPREME COURT has held that the authorities under Act cannot travel beyond the show-cause notice. Further I find that in the show-cause notice as well as in Order-in-Original the refund has been rejected only on the ground that the said insurance services have not been approved by the Approval Committee of the SEZ and hence the appellants are not entitled to the refund. Even on merit the said services fall in the definition of insurance service and has also been approved by the Unit Approval Committee read with Ministry of Commerce Industry letter dated 16/09/2013 and subsequent letters dated 19/11/2013 19/06/2014 09/07/2014 which includes General Insurance Business Services at Sl. No. 26. Further it is found that the General Insurance Business Services also form part of the default list of services specified by the Karnataka Special Economic Zone vide Circular No. 2/2014 dated 25/07/2014 - Further this Tribunal in the case of Barclays Global Service Centre Pvt. Ltd. 2018 (6) TMI 1080 - CESTAT MUMBAI held that Medical Insurance and Personal Accident Insurance are covered under the General Insurance Business. Also it has been consistently held by the Tribunal in the appellant s own case as well as in other cases that mere non-inclusion of services in the list of Unit Approval Committee shall not be a ground for rejection of refund claim. The provisions of Special Economic Zones Act 2005 has an overriding effect over other laws in force. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection for Health Insurance Services and Meal Passes.

Analysis:
The appellant, a Private Limited Company registered under the Companies Act, 1956 and as a SEZ unit, filed refund claims for service tax paid on specified input services for authorized SEZ operations. The services included Health Insurance, Medical Insurance, and Personal Accident Insurance from Religare Health Insurance Company Ltd. The Department rejected the refund claim as the services were not on the default list approved by the Development Commissioner. The original authority allowed the refund partially but rejected it for Health Insurance Services and Meal Passes. The Commissioner (Appeals) allowed the refund based on SEZ Act overriding the Finance Act, but rejected it citing exclusion clauses. The appellant argued that the services were used for authorized operations, referring to General Insurance Business Services on the default list. The appellant cited legal definitions and precedents to support their claim.

The appellant contended that the impugned orders were unsustainable as they did not consider relevant facts and laws, including binding judicial precedents. The appellant argued that the rejection based on services not on the default list was unjustified, as the services were used for SEZ operations. The appellant highlighted that the services fell under General Insurance Business Services on the default list, supported by legal definitions and previous tribunal decisions. The appellant differentiated between "specified services" and "input services" under Notification No. 12/2013-ST, emphasizing that the impugned order wrongly applied Cenvat Credit Rules to specified services. The appellant invoked SEZ Act provisions and legal precedents to support their claim that the impugned order erred in rejecting the refund claim.

The Tribunal found that the impugned orders were unsustainable as they rejected the refund claim based on exclusion clauses not raised in the show-cause notice. The Tribunal emphasized that the authorities cannot go beyond the scope of the show-cause notice. Additionally, the Tribunal noted that the services fell under General Insurance Business Services on the default list, supported by relevant Ministry of Commerce & Industry letters and tribunal decisions. The Tribunal held that the SEZ Act provisions had an overriding effect and set aside the impugned orders, allowing both appeals of the appellant.