2024 (6) TMI 88 - AT - Service Tax

Refund claim - rejection on the ground that Services not covered under default list - Invoices of Services addressed to the outside of SEZ premises and having incomplete address - invoices were not produced before the Department - N/N. 17/2011-ST dated 01.03.2011 - HELD THAT - It is informed that no order in the denovo proceedings have been passed by the Original Authority. As the issue is squarely covered in 2023 (12) TMI 1301 - CESTAT ALLAHABAD , it would be fit that this matter is also remanded for a decision in light of the observations made in that order. The matter remanded to the original authority for reconsideration of the refund claims in the light of the observations made in appellant's own case - As the issue is in respect of the refund claims filed for the period from January 2012 to March 2012, Original Authority is directed to finalize the refund claims in remand proceedings within three months of the receipt of this order. Appeal allowed by way of remand.

Summary

Issues:
1. Rejection of refund claim based on services not covered under the default list.
2. Rejection of refund due to invoices addressed outside SEZ premises or with incomplete address.
3. Denial of refund for non-production of invoices.
4. Excess refund claim and its withdrawal.
5. Payment of duty liabilities from Cenvat account for services used in SEZ operations.

Analysis:

1. Rejection of refund claim based on services not covered under the default list:
The appellant's refund claim was rejected as certain services were not approved by the Approval Committee as required by Notification No. 17/2011-ST. The appellant claimed credit on Advertisement Service, Photography Services, and Real Estate Service, but failed to provide sufficient evidence of approval for these services. Additionally, the default list approved by the Development Commissioner did not apply to the Noida SEZ units, leading to the denial of the refund claim for Real Estate Agent's Services.

2. Rejection of refund due to invoices addressed outside SEZ premises or with incomplete address:
Refund was denied as invoices were addressed outside the SEZ premises or had incomplete addresses. The appellant argued that during a relocation process, invoices were temporarily addressed to the DTA location, but the services were for SEZ operations. However, the Tribunal found these invoices did not comply with the Cenvat Credit Rules, making the refund claim invalid.

3. Denial of refund for non-production of invoices:
The refund was rejected due to non-production of invoices by the appellant. Although the appellant claimed to have submitted the invoices in response to the Show Cause Notice, no evidence was provided to support this claim. The Tribunal also noted that the list of default services submitted by the appellant was not applicable to their case, leading to the disallowance of the refund claim.

4. Excess refund claim and its withdrawal:
The appellant admitted to mistakenly claiming an excess refund amount and voluntarily withdrew the amount of Rs. 3,090 related to services rendered by a specific provider. The Tribunal considered this issue settled as the excess amount was withdrawn by the appellant.

5. Payment of duty liabilities from Cenvat account for services used in SEZ operations:
The appellant paid duty liabilities from the Cenvat account for services used in SEZ operations, which was in violation of Notification No. 17/2011-ST. The Tribunal held that Cenvat credit could not be used for such payments, and the amount of Rs. 6,41,335 was required to be paid in cash. The appellant's reliance on a Board Circular was deemed irrelevant, and the amount was deemed recoverable along with applicable interest.

In conclusion, the Tribunal allowed the appeals and remanded the matter to the original authority for reconsideration of the refund claims in light of previous orders and observations. The Original Authority was directed to finalize the refund claims within three months of receiving the order.