2015 (3) TMI 182 - AT - Service Tax

Denial of refund claim u/s 11B - SEZ - assessee claimed refund of service tax paid thereon under Notification No.9/2009-ST dated 3rd March, 2009, as amended by Notification No.15/2009-ST dated 20th May, 2009 - Department was of the view that the services consumed within the SEZ are exempt from tax. Hence, no refund can be claimed on such exempt input services under the Notifications - Held that - Following decision of Tata Consultancy Services 2012 (8) TMI 500 - CESTAT, MUMBAI and Wardha Power Company 2012 (5) TMI 289 - CESTAT, MUMBAI - Thus the appellant is eligible for refund of service tax paid on input services wholly consumed within SEZ under the provisions of section 11B of the Central Excise Act, 1944, read with section 83 of the Finance Act, 1994, subject of course to the satisfaction of conditions stipulated therein - Decided in favour of assessee.

Summary

Issues:
- Refund of service tax paid on input services wholly consumed within SEZ under notification No. 9/2009-ST.

Analysis:
1. Background: The case involves 5 appeals against Orders-in-Appeal passed by the Commissioner of Central Excise, Pune, concerning M/s. Credit Suisse Service Pvt. Ltd., a unit in the Special Economic Zone (SEZ) providing IT support and BPO services. The appellant claimed refund of service tax on input services under notification No. 9/2009-ST during October 2009 to February 2011.

2. Contention: The appellant claimed refund for input services wholly consumed within SEZ, which the department rejected, stating that services wholly consumed within SEZ are exempt from tax and thus not eligible for refund under the notification.

3. Appellant's Argument: The appellant argued that refund should be granted based on previous Tribunal decisions and a circular clarifying refund options for exempt services. They cited cases like Tata Consultancy Ltd. and Wardha Power Company where it was held that refund of service tax on exempt services is available under section 11B of the Central Excise Act, 1944, if not under the notification.

4. Revenue's Stand: The Revenue, represented by the ld. Additional Commissioner, supported the lower appellate authority's findings.

5. Tribunal's Decision: The Tribunal referred to previous cases and held that the appellant is entitled to a refund of service tax paid on input services wholly consumed within SEZ under section 11B of the Central Excise Act, 1944, irrespective of the provisions of notification No. 9/2009-ST. The Tribunal emphasized that services provided to a SEZ or unit within the SEZ are deemed as export, entitling them to exemption from service tax.

6. Conclusion: Therefore, the appeals were allowed, granting the appellant the refund of service tax paid on input services wholly consumed within SEZ under the provisions of section 11B of the Central Excise Act, 1944, subject to meeting the stipulated conditions.