2022 (11) TMI 1278 - AT - Service Tax

Refund claim - refund was rejected on the ground that trenching work for irrigation network was not fully within the SEZ and partly outside the SEZ - N/N. 09/2009-ST as amended by 15/2009-ST - HELD THAT - Once it is admitted that service tax payable on the service received and consumed within SEZ, the same is not taxable and the same is to be refunded even without applying Notification No. 09/2009. Refund claim - CHA Service - rejection on the ground that it is not CHA service as the invoice shows various costs such as salaries and other expenses - HELD THAT - Even though total service charge of CHA was bifurcated under different heads but the fact remains that service was provided by CHA towards CHA service only. Therefore, merely because the invoice is for amount towards various expenses but the same were in relation to CHA service by the CHA, hence, the refund cannot be rejected. Refund claim - Construction service received from Jay Khodiyar in relation to construction of trenching and pipelines - HELD THAT - The construction was exclusively for SEZ only. It is very obvious that a part of the same will be outside the premises of the SEZ but that does not mean that service was received for other than authorised operations of SEZ. Accordingly, on the admitted fact that trenching pipeline installed partly in SEZ and partly outside but for use in operation of the SEZ is admissible and the refund of the same is clearly admissible. The appellant are entitled for the refund - Appeal allowed - decided in favor of appellant.

Summary

Issues:
Refund claim rejection for construction service wholly consumed within SEZ under Notification No. 09/2009-ST.
Refund claim rejection for CHA Service due to various costs mentioned in the invoice.
Refund claim rejection for trenching work for irrigation network partly outside SEZ under Notification No. 09/2009-ST.

Analysis:
1. Construction Service Refund Rejection:
The Adjudicating Authority rejected the refund claim for construction service consumed within SEZ, stating it was not governed by Notification No. 09/2009. However, the Tribunal found that if service tax is paid for services consumed within SEZ, even if not payable, it should be refunded without applying the said notification.

2. CHA Service Refund Rejection:
The refund for CHA Service was denied based on the assumption that various costs mentioned in the invoice indicated services beyond CHA service. The Tribunal disagreed, emphasizing that despite cost bifurcation, the service was solely provided by CHA for CHA service, making the refund admissible.

3. Trenching Work Refund Rejection:
Regarding trenching work for irrigation partly outside SEZ, the refund was rejected under Notification No. 09/2009. The Tribunal clarified that as the construction was exclusively for SEZ operations, even if partly outside, the refund was permissible as it was intended for SEZ use.

In conclusion, the Tribunal allowed the appeals, setting aside the impugned orders and granting the refunds based on the services being consumed within SEZ or intended for SEZ operations. The decision highlighted the eligibility for refunds even without strict application of Notification No. 09/2009, emphasizing the core purpose and consumption of the services within the SEZ.