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TMI Blog2020 (9) TMI 388X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Point of Taxation Rules. Further, there is no such essential condition of payment of amount to the service provider. The Adjudicating Authority is directed to grant the refund of ₹ 11,23,911/- within a period of 45 days from the receipt of this order alongwith interest as per rules - appeal allowed - decided in favor of appellant. - Service Tax Appeal No. 52171 of 2016-SM - FINAL ORDER No. 50762/2020 - Dated:- 10-9-2020 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) Shri Shashwat Arya, Advocate for the appellant Shri P. Gupta, Authorised Representative for the respondent ORDER The appellant, M/s Cummins Technologies India Pvt. Limited is a unit located in Special Economic Zone (SEZ) at Pithampur, M.P. and are engaged in the manufacture of Turbo chargers and parts, components, sub assembly of turbochargers, which is the authorised operation under the SEZ scheme. The present appeal is filed against the impugned order-in-appeal whereby refund claim by the appellant being service tax paid for the services received in the SEZ has been rejected in part. 2. The appellant has received Customers Support Services from its associated enterprise, Wuxi Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tside or imported into India, or procured for domestic tariff area by a unit in SEZ or a developer, subject to such terms and conditions and limitation, as may be prescribed, exempt from payment of tax, duties, cess under all enactment specified in the first schedule. Further, Section 26(1)(e) provides that sub section (2) thereof, every developer and entrepreneur shall be entitled to exemption from service tax under Chapter-V of the Finance Act on taxable services provided to a developer or a unit, to carry on the authorised operation in the SEZ under the Act. Further, Section 51 of the SEZ Act provides an overriding effect over other Acts. 5. In order to effectuate the mandate of exemption of service tax to a unit or developer in SEZ, the Government have provided for the mechanism of refund of service tax under notification issued under Section 93(1) of the Finance Act. Accordingly, the appellant to claim the exemption from payment of service tax, applied for refund of the service tax paid under RCM in terms of Notification No. 42/2012-ST read with amending Notification No. 12/13-ST by filing refund application on 17.12.2013 for the period July, 2012 to July, 2013, for an amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operation, as approved by the Approval Committee of SEZ, a copy of declaration form A-1, invoice or a bill, copy of challan towards proof of payment of tax, declaration by the unit in SEZ to the effect that the services /specified service on which refund is claimed, has been used for the authorised operation in the SEZ, proper account of such specified services received and used is maintained, to be produced before the officer sanctioning refund and the account or documents of the SEZ unit in proof of payment of service tax and its refund based on the invoice/ bill for the challan as the case may be. The Assistant Commissioner observed that the appellant have not only complied with the declaration required in para 3 (f)(ii) (iii) but also the prescribed condition at para 2(g) of the said notification. Condition 2(g) provides for not taking of cenvat credit of service tax paid, under the Cenvat Credit Rules. 9. As regards the objection of Revenue under Section 66B of the Finance Act, the appellant explained that the place of service is the location of recipient of the service under Rule 3 of Place of Provision of Service Rules, 2012 . Accordingly, as the appellant company is lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ioner have travelled beyond the scope of show cause notice, as no such proportionate disallowance of refund was proposed on the basis of payment made. The Commissioner (Appeals) have observed that the service agreement was not solely for SEZ unit, and hence the said ground was rejected. It was further observed that the appellant have submitted proof of payment of service tax, but have not submitted any evidence to establish that service tax was paid for services received and utilised by them. 12. As regards the ground that service tax has been rightly paid under the Point of Taxation Rules, it was further observed that appellant have failed to present a case whether the condition of notification in question have been fulfilled alongwith documentary evidence, in support of the claim. It was further observed that in absence of payment to service provider for the period January, 2013 to July 2013, the service does not seem to have been received. Accordingly, the order-in-original was upheld. 13. Being aggrieved, the appellant is before this Tribunal inter alia on the grounds that there is unequivocal exemption from payment of service tax on receipt of input services for authoris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a SEZ claiming exemption by way of refund, to have paid the amount indicated in the invoice/ bill or as the case may be, challan, including the service tax payable, to the person liable to pay the said tax or the amount of service tax payable under reverse charge, as the case may be, under the provisions of the said Act. 16. Accordingly, I find that the Court below have erred in misconstruing the condition in clause (f) of Sl. No.(ii) of the Notification No. 40/2-12-ST as the requirement is - SEZ developer or unit has paid the service tax payable under reverse charge or as the case may be. Admittedly, appellant have paid the service tax under reverse charge and produced the challan, and further I hold that they have rightly discharged the service tax as recipient of service in terms of 2nd proviso to Rule 7 of the Point of Taxation Rules. I further find that there is no such essential condition of payment of amount to the service provider. Accordingly, the appeal is allowed with consequential benefits and the impugned order is set aside to the extent it has disallowed the refund amount of ₹ 11,23,911/-. 17. The Adjudicating Authority is directed to grant the refund of & ..... X X X X Extracts X X X X X X X X Extracts X X X X
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