2018 (3) TMI 269 - AT - Service Tax

Allowability of exemption for services released by Unit in SEZ - refund claim - Held that - the issue herein is squarely covered in favour of the appellant by Single Member Bench ruling of this Tribunal in the case of Intas Pharma Ltd Vs. CST 2013 (7) TMI 703 - CESTAT AHMEDABAD , where it was held that any service tax paid/ remitted by a service provider is liable to be refunded to the provider who has remitted service tax in relation to taxable services provided to the unit to carry on authorized operations in a SEZ - appellant shall be entitled for the consequential benefit including the refund of service tax rejected earlier - appeal allowed - decided in favor of appellant.

Summary

Issues:
Allowability of exemption for services released by Unit in SEZ.

Analysis:
The issue in this appeal pertains to the allowability of exemption for services released by a Unit in a Special Economic Zone (SEZ). The appellant, engaged in the manufacture of solar products within an SEZ, applied for exemption under Notification No.9/2009-ST dated 03.03.2009, which provided for service tax exemption on services used for authorized operations in SEZ. The appellant's refund claim was rejected based on subsequent amendments to the notification disallowing exemption for services consumed wholly within the SEZ. The appellant contended that the benefit of the notification should be available from the date of its publication, i.e., 03.03.2009, as clarified by a circular issued by the Assistant Development Commissioner, Noida SEZ.

The appellant relied on a precedent decision by the Tribunal in the case of Intas Pharma Ltd. CST, Ahmedabad, where it was held that the notifications did not disentitle immunity to service tax provided under the law. The Tribunal also referenced a similar decision in the case of TATA Consultancy Services Ltd. Vs. CCE (LTU), Mumbai, supporting the appellant's position. The Tribunal concluded that the issue was already settled in favor of the appellant by previous judgments and allowed the appeal, setting aside the impugned order that disallowed the refund of service tax to the appellant. The appellant was granted the refund along with consequential benefits, directing the concerned authority to process the refund within 45 days from the date of the order.

In summary, the Tribunal ruled in favor of the appellant, holding that the exemption for services used in SEZ operations should be granted as per the provisions of Notification No.9/2009 from the date of its publication. The appellant's claim for refund of service tax was allowed, citing previous decisions supporting the appellant's interpretation of the law regarding service tax exemptions in SEZs.