2016 (12) TMI 1336 - AT - Service Tax

SEZ unit - Refund claim - N/N. 9/2009-ST dated 3.3.2009 - telecommunication service - Held that - reliance placed upon the decision of the CESTAT in the case of Keltech Engineering Pvt. Ltd. 2008 (1) TMI 96 - CESTAT BANGALORE - wherein the Tribunal allowed the CENVAT credit on landline telephone and held that mobile phones and landline phones have been installed by the Company for business purpose and the bills are paid by the company and, it has to be considered as input services - appeal allowed - refund allowed - decided in favor of appellant.

Summary

Issues:
Refund claim on telecommunication service within SEZ area.

Analysis:
The appellant, a SEZ unit manufacturing windmill parts, claimed a refund of &8377; 5,018/- under Notification No.9/2009-ST. The Assistant Commissioner sanctioned a refund of &8377; 94,466/- but rejected the &8377; 5,018/- refund on telecommunication service. The Commissioner (A) upheld this decision, leading to the present appeal. The appellant argued that the rejection of the telecommunication service refund was unjust as the telephone instruments were used solely for authorized operations within the SEZ area. Citing a precedent where CESTAT allowed CENVAT credit on landline telephones used for business purposes, the appellant contended that the telecommunication expenses were legitimate business expenses. The AR, however, supported the findings of the impugned order.

The Tribunal, after considering the appellant's arguments and the precedent cited, concluded that the issue was in favor of the appellant. Therefore, the Tribunal allowed the appeal, setting aside the impugned order and granting consequential relief, if any. The operative portion of the order was pronounced on 15/11/2016.