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2019 (3) TMI 971 - AT - Service TaxRefund of duty paid - services wholly consumed within SEZ - case of Revenue is that the Ld. Commissioner. while allowing the appeal has not seen that the condition 1(c) of notification no. 09/2009-ST dated 03/03/2009 was not complied with - Held that - Since the service was wholly consumed within SEZ, the appellant is otherwise entitled for the refund. It is also observed that as regard the condition and documents, the Ld. Commissioner has given a categorical finding. Therefore, there is no infirmity in the order. On the identical facts, this tribunal has taken view in the case of Zydus BSV Pharma Pvt. Ltd. Vs. CST Ahmedabad 2018 (8) TMI 961 - CESTAT AHMEDABAD has held that the exemption by way of refund is not available to the services consumed wholly within the Special Economic Zone however as per the first para of the notification all the services provided in relation to authorized operations in a SEZ and received by SEZ unit are exempted therefore the services received by the appellant even though consumed wholly within the SEZ are exempted per se. The appellant was rightly entitled for the refund - appeal dismissed - decided against Revenue.
Issues Involved:
1. Compliance with Notification No. 09/2009-ST and Notification No. 15/2009-ST. 2. Eligibility for refund of service tax for services consumed wholly within a Special Economic Zone (SEZ). Detailed Analysis: 1. Compliance with Notification No. 09/2009-ST and Notification No. 15/2009-ST: The primary issue revolves around whether the appellants complied with the provisions of Notification No. 09/2009-ST dated 03.03.2009, as amended by Notification No. 15/2009-ST dated 20.05.2009. The Show Cause Notice (SCN) issued on 17.09.2009 proposed the rejection of the refund claim amounting to ?12,93,079/- under Section 11B of the Central Excise Act, 1944. The reason was the appellant’s failure to produce the necessary evidence and documents demonstrating that the taxable services provided by the SEZ unit were consumed partially or wholly within the SEZ, as required by the notifications. The adjudicating authority rejected the refund claim on the grounds of non-compliance with the notification provisions. However, the Commissioner (Appeals) allowed the appeal on merit, which led to the Revenue filing the present appeal. 2. Eligibility for Refund of Service Tax for Services Consumed Wholly within SEZ: The Revenue's contention was that the refund is applicable only for services partly consumed within the SEZ and partly outside, as per condition 1(c) of the notification. Since the services in question were wholly consumed within the SEZ, the Revenue argued that the condition was not fulfilled, and thus the refund should not be allowed. The respondent argued that even if the services were wholly consumed within the SEZ, the appellant is entitled to a refund without any condition in terms of Section 11B. The respondent cited multiple judgments to support this stance, asserting that the exemption notification should not be interpreted to deny refunds for services consumed wholly within the SEZ. Tribunal's Findings: The Tribunal found that the only ground for the Revenue’s appeal was the alleged non-compliance with condition 1(c) of the notification. However, it was observed that since the services were wholly consumed within the SEZ, the appellant is entitled to the refund. The Tribunal noted that the Commissioner had given a categorical finding regarding the condition and documents, and thus, there was no infirmity in the order. The Tribunal referred to several judgments, including those in the cases of Zydus BSV Pharma Pvt. Ltd. and Intas Pharma Ltd., which established that services consumed wholly within the SEZ are exempted per se. The Tribunal highlighted that the exemption by way of refund is not governed by Notification No. 09/2009-ST but by Section 11B of the Central Excise Act, 1944, when service tax is paid on services that are otherwise exempted. Conclusion: The Tribunal upheld the order of the Commissioner (Appeals) and dismissed the Revenue’s appeal. It directed the sanctioning authority to verify the quantification and process the refund in accordance with the law. The Tribunal concluded that the appellant was rightly entitled to the refund, and the impugned order was upheld. Operative Portion: The operative portion of the order was pronounced in the open Court, affirming the appellant's entitlement to the refund and dismissing the Revenue's appeal.
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