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2014 (6) TMI 423 - AT - Service TaxDenial of refund claim - Refund in respect of the services exclusively provided to SEZ - Held that - There is no dispute about the refund of ₹ 43,656/-, which was also not the subject matter of the Tribunal s order dated 04.04.2012. The dispute before the Tribunal was in respect of ₹ 1,25,920/-, which related to the refund of common services. As such, the percentage of the value of the services has to be applied to the common services and not to the entire refund claim. - Matter remanded back - Decided in favour of assessee.
Issues: Refund claim for input services provided to Special Economic Zone (SEZ), rejection of part of the refund claim, application of percentage to calculate refund amount, remand for recalculation of refund entitlement.
In this judgment, the issue revolved around a refund claim filed by the appellants for input services provided to a Special Economic Zone (SEZ). The lower authorities had sanctioned a partial refund of Rs.43,656 for services exclusively provided to the SEZ, while rejecting the balance amount of Rs.1,25,920 that was related to services provided both inside and outside the SEZ. The Tribunal remanded the matter for re-calculation of the refund to consider the value of services rendered inside and outside the SEZ. During the re-adjudication, the appellants presented a Chartered Accountant certificate indicating that 49.16% of the services were provided to the SEZ. The lower authorities applied this ratio to the total refund claim of Rs.1,69,576, considering the already sanctioned amount of Rs.43,656, and allowed a balance refund of Rs.39,708. The appellants contended that the 49.16% ratio should only apply to the disputed amount of Rs.1,25,920, as the sanctioned refund of Rs.43,656 was not in dispute and was exclusively for services provided to the SEZ. The Tribunal agreed with the appellants' argument, stating that the percentage of the value of services should be applied to the common services and not to the entire refund claim. Therefore, the Tribunal set aside the impugned order and remanded the matter to the original adjudicating authority for a recalculation of the appellants' entitlement to the refund in accordance with the observations made. Ultimately, the appeal was allowed by way of remand, emphasizing the need for proper calculation of the refund entitlement based on the specific services provided to the SEZ and those outside the SEZ area.
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