2024 (4) TMI 226 - AT - Service Tax

Refund claim - services consumed by the SEZ unit may be incorporated or not in the list of the services for authorized services for use by a SEZ unit or a developer - denial of refund claim on the ground that the services are not mentioned in the list of specified services approved by the SEZ authorities - HELD THAT - The refund is admissible in view of the decision in the case of TEGA INDUSTRIES LIMITED VERSUS C.C.E. S.T. -VADODARA-II 2022 (6) TMI 821 - CESTAT AHMEDABAD where it was held that keeping in view of the intention of the Government in enacting the SEZ Act and giving special fiscal concessions SEZs I am of the considered opinion that this is only a procedural and is not a mandatory condition as held by the Commissioner (Appeals). Further the decisions relied upon by the appellant clearly held that the SEZ Act has an overriding effect over other laws. Therefore this ground on the basis of which refund claims have been rejected is not tenable in law. Denial of claim for refund against invoices which contains has been addressed to Appellant s Unit outside the SEZ but has been consumed within the SEZ - HELD THAT - The matter was remanded for consideration whether these services for which invoices are addressed to the premises of the appellant which fall outside the SEZ unit would be admissible as refund amount. After taking note to the various decisions and law it has been held that such refund shall be admissible subject to the appellant satisfying the Original Adjudicating Authority with regards to receipt as consumption of services within SEZ unit. Appeals allowed by way of remand.

Summary

Issues involved:
1. Denial of claim for refund based on specified services approved by SEZ authorities.
2. Denial of claim for refund against invoices addressed to Appellant's Unit outside the SEZ but consumed within the SEZ.

Issue 1 - Denial of claim for refund based on specified services approved by SEZ authorities:
The issue involved in the first appeal (ST/70531/2020) was the denial of a refund claim under notification No.9/2009-ST on the grounds that services were not listed as specified services approved by SEZ authorities. The second appeal (ST/70529/2020) also dealt with a similar denial of refund claim against invoices consumed within the SEZ but addressed to the Appellant's Unit outside the SEZ. The Tribunal had previously considered these issues in Final Order Nos.70277-70280/2023 and remanded the second matter back to the Original Authority for further consideration.

Upon review, it was found that the issue was covered by the Tribunal's previous order dated 21 December, 2023. The Tribunal discussed whether refund should be admissible for services consumed by the SEZ unit, even if not specifically listed as authorized services. Citing various decisions, including EXL Services SEZ BPO Solutions Pvt. Ltd. and Tega Industries Ltd., it was concluded that such refunds are admissible. The Tribunal emphasized that the SEZ Act's provisions override other laws, and procedural lapses should not lead to refund denials.

Issue 2 - Denial of claim for refund against invoices addressed to Appellant's Unit outside the SEZ:
Regarding the second issue, the Tribunal examined whether services invoiced to the Appellant's Unit outside the SEZ but consumed within the SEZ would qualify for a refund. Relying on precedents such as SRF Ltd., it was determined that refund claims cannot be denied solely based on the address on the invoice. The Tribunal allowed both appeals by remanding them for further consideration in line with the observations made in the previous order dated 21 December, 2023.

In conclusion, the Original Authority was directed to finalize the refund claims within three months from the receipt of the Tribunal's order, ensuring a timely resolution of the longstanding matter.