2021 (3) TMI 1007 - AT - Service Tax

Refund of service tax paid - the only ground on which refund has been rejected is that the said specified services are not included in the Default List and services approved by the Development Commissioner of SEZ - Notification No.12/2013-ST dated 01.07.2013 - HELD THAT - There is no dispute that the said services have been used by the appellant for authorized operation in the SEZ. Further, not mentioning the said services in the Approved List is only a technical defect and it should not debar the substantive benefit to the assessee who has utilized those services for carrying out authorized operation. It is noted that both the input services have been subsequently included by the Development Commissioner of SEZ in the List of default services. The impugned order is not sustainable in law - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection based on non-inclusion of specified services in the Approved List by Development Commissioner of SEZ.

Analysis:
The appellant, registered under Service Tax for providing IT Software Services, filed a refund claim for service tax paid on input services used for SEZ operations. The Assistant Commissioner approved a partial refund but rejected a portion citing non-inclusion of certain services in the Approved List by the Development Commissioner. The Commissioner (Appeals) upheld the rejection, leading to the present appeal.

The appellant argued that the rejection was improper as the services were essential for authorized operations, despite not being listed. They contended that SEZ Act overrides other acts and notifications, emphasizing the need to assess if services were used for authorized operations. The appellant also highlighted subsequent inclusion of services in the Default List by the Development Commissioner.

The Tribunal analyzed the case, noting that the services were indeed used for authorized operations within the SEZ. It considered non-inclusion in the Approved List a technical defect, not barring benefits to the appellant. Citing precedents like Commissioner of Central Excise Mangalore Commissionerate Vs Mangalore SEZ Ltd., the Tribunal emphasized that denial of refund due to technicalities was unjustified.

Referring to Intas Pharma Ltd. Vs CST, Ahmedabad and other cases, the Tribunal reiterated that SEZ Act's provisions prevail, allowing refund claims for services used within SEZ. It emphasized that procedural lapses, like non-inclusion in lists, should not hinder valid refund claims. Relying on various decisions, the Tribunal ruled in favor of the appellant, setting aside the impugned order and allowing the appeal.

In conclusion, the Tribunal's decision highlighted the importance of assessing whether services were utilized for authorized operations within SEZ, emphasizing the primacy of SEZ Act's provisions in refund claims despite technical deficiencies in lists. The ruling underscored the need to ensure substantive benefits to entities utilizing services for approved operations within SEZ, regardless of minor procedural shortcomings.