2024 (5) TMI 373 - AT - Service Tax

Refund claim for service tax paid on specified services used in relation to authorized operations in the SEZ unit - rejection of refund on the ground that wrong address being mentioned in the invoices and the input services have not been consumed in the SEZ unit - refund sanctioning authority held that the input services have not been consumed in the SEZ unit, merely on account of raising of invoices by the service providers on the registered office of the company instead of its SEZ unit - N/N. 12/2013-ST dated 01.03.2013 - HELD THAT - The respondent has brought on record the fact that the registered office of the company does not carry out any operation and it is merely a liasoning office and has been established only for the purpose of correspondence with vendors etc and in compliance with provisions of the Companies Act and no commercial activity is being undertaken from this office and also, no GST registration is obtained for this office by the respondent. All the input services have been consumed in the SEZ unit located in Gurugram, Haryana, which is further cleared from the declarations issued by the service providers specifically stating that the input services in question have been provided by them to the SEZ unit and the same have been consumed in the SEZ unit only. This issue is no more res integra as the same has been decided by various courts in a plethora of decisions consistently holding that the Cenvat Credit cannot be denied pertaining to certain input service invoices which are addressed to unregistered premises of the respondent. In this regard, reference made to the decision of the Hon ble Allahabad High Court in the case of M/S CYQUATOR MEDIA SERVICES P. LTD. VERSUS UNION OF INDIA THRU' ITS SECY. 2 OTHERS 2017 (12) TMI 775 - ALLAHABAD HIGH COURT wherein Hon'ble High Court while deciding a similar issue has held that if all the information as stipulated in Rule 4A of Service Tax Rules is mentioned on the invoice, the Cenvat Credit cannot be denied. Further it is found that the receipt and the use of input services by the respondent have not been questioned by the Department and the issue relates only to validity of invoices which were issued to the wrong address, which is not registered with the Service Tax - it is a settled law that substantial benefit cannot be denied merely on a procedural infraction. There are no infirmity in the impugned order and the same is upheld - the respondent is entitled to refund of service tax paid on input services used in relation to authorized operations in their SEZ unit situated in Gurugram, Haryana. The appeal of Revenue dismissed.

Summary

Issues:
The issues involved in the judgment are the rejection of a refund claim u/s Notification No. 12/2013-ST dated 01.03.2013 for service tax paid on specified services used in relation to authorized operations in a Special Economic Zone (SEZ) unit.

Summary:
The respondent, engaged in providing information technology software and business support services, filed a refund claim for service tax paid on specified services used in its SEZ unit. The refund claim was partially rejected by the refund sanctioning authority, leading to an appeal by the respondent before the Commissioner (Appeals). The rejection was based on the ground that invoices were addressed to the respondent's registered office, not the SEZ unit. The Commissioner (Appeals) remanded the matter back to the adjudicating authority, directing not to reject the claim based solely on the address discrepancy. The Department appealed this decision, and the respondent filed a cross objection.

Upon hearing both parties, it was argued by the Department that input services were not consumed for authorized operations as invoices were addressed to the registered office. In response, the respondent contended that all services were used for SEZ operations, clarifying that their registered office was solely for correspondence purposes. Declarations from service providers confirmed services were consumed in the SEZ unit. Legal precedents were cited to support the claim that benefits should not be denied for procedural lapses.

The Tribunal found that all input services were consumed in the SEZ unit, despite invoices being addressed to the registered office. Citing legal precedents, the Tribunal upheld the respondent's claim, emphasizing that benefits should not be denied for procedural errors. The Department did not question the use of services, only the validity of invoices. The Tribunal ruled in favor of the respondent, allowing the refund claim for service tax paid on input services used in the SEZ unit.

Therefore, the appeal of the Revenue was dismissed, and the respondent was granted the refund of service tax paid on input services used in their SEZ unit in Gurugram, Haryana.