2017 (10) TMI 508 - AT - Service Tax

Refund of service tax paid - denial on the ground that the appellant had not obtained approval of the list of taxable services required for the authorised operations from the approval committee - Held that - The appellant has obtained the approval letter dated 23.04.2012 for the list of services used for authorized operations. The refund claim has been filed on 24.10.2012 after obtaining the approval from the approval committee - the appellant has sufficiently complied with the conditions in the notification - refund allowed. Refund claim - denial on the ground that the appellant has contravened the condition which stipulates that appellant shall not take CENVAT credit of the service tax paid on specified services - Held that - The appellant has reversed the credit and therefore the said condition has been sufficiently complied by the appellant - refund allowed. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of refund claim based on non-compliance with conditions for SEZ unit regarding service tax refund.

Analysis:
The appellant, a Special Economic Zone (SEZ) unit providing Information Technology Software Services (ITSS), filed a refund claim for service tax paid on specified services used for authorized operations. The claim was rejected citing two grounds: failure to obtain approval of taxable services list and taking CENVAT credit on service tax paid. The appellant argued that they reversed the CENVAT credit and obtained approval before filing the refund claim, meeting the conditions of Notification No. 17/2011. The Tribunal acknowledged the appellant's compliance with reversing the credit, holding that condition sufficiently fulfilled.

Regarding the approval of the list of taxable services, the appellant had obtained approval before filing the refund claim and submitted the claim with the approval letter. The Tribunal noted that the approval letter was dated before the claim submission, indicating compliance with the condition. Consequently, the Tribunal found the rejection of the refund claim unjustified and set aside the impugned order, allowing the appeal with consequential reliefs, if any. The judgment emphasizes the importance of meeting SEZ unit conditions for service tax refunds, particularly regarding obtaining approval for taxable services and handling CENVAT credits diligently to ensure compliance with relevant notifications.