2017 (11) TMI 884 - AT - Service Tax

Refund claim - input services - courier service - transportation of goods - control tower charges used in SEZ operations - denial on the ground that the services were post manufacturing expenses and some of the services were wholly consumed in SEZ - Held that - the assessee is entitled for refund of service tax paid for the services which is in relation to authorised operations in the SEZ - the refund in respect of the transportation service is allowed by relying upon the decision in the case of Tata Consultancy Services Ltd. 2012 (8) TMI 500 - CESTAT, MUMBAI - appeal dismissed - decided against Revenue.

Summary

Issues:
Refund of service tax on transportation of goods in SEZ operations.

Analysis:
The appeal was filed by the Revenue against the Commissioner(Appeals) order setting aside the Order-in-Original rejecting the refund on transportation of goods. The respondent had applied for a refund of service tax paid on input services like courier service transportation of goods in SEZ operations. The Revenue argued that transportation of goods is a post-manufacturing operation related to the sale of goods and not part of the authorized operation of manufacture. On the other hand, the respondent contended that transportation of goods is in relation to the authorized operation, citing trading of goods, CIF basis sales, and specific inclusion of transportation services in the list of authorized operations.

The respondent further argued that the Notification No.9/2009-ST does not require the Department to re-examine if services are used in authorized operations, but only to verify if service tax has been paid. They referenced various decisions supporting their stance, including Tata Consultancy Services Ltd. Vs. CCE(LTU), Mumbai and Dell India Pvt. Ltd. Vs. CST, Bangalore. The appellant also relied on the decision in Wardha Power Co. Ltd. Vs. CCE, emphasizing that SEZ units can claim refunds for services related to authorized operations regardless of the service location.

The Tribunal, after considering submissions and case law, upheld the Commissioner(Appeals) order. It was noted that the respondent's refund for transportation service had been allowed in a previous Tribunal decision, and consistent rulings supported entitlement to refunds for service tax paid on services related to authorized SEZ operations. The Tribunal found no fault in the impugned order and dismissed the Revenue's appeal, affirming the refund entitlement for transportation services in SEZ operations.

This detailed analysis of the judgment highlights the key arguments presented by both parties, the legal interpretations of the relevant notifications, and the application of precedent cases in determining the entitlement to a refund of service tax on transportation of goods in SEZ operations.