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TMI Blog2022 (1) TMI 972X X X X Extracts X X X X X X X X Extracts X X X X ..... of appellant-assessee. - Service Tax Appeal No. 50512 of 2019 AND Service Tax Appeal No. 51291 of 2019 - FINAL ORDER Nos. 52121 - 52122/2021 - Dated:- 24-12-2021 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) AND MR. P. V. SUBBA RAO, MEMBER (TECHNICAL) Sh. B. L. Narasimhan, Advocate for the assessee Dr. Radhey Tallo, Authorised Representative for the Revenue ORDER The issue involved in these cross appeals is whether the refund of Service Tax have been rightly rejected on the lease premium charges paid by the appellant SEZ unit. 2. Global Stones Private Limited ( Global Stones ) is engaged in the manufacture of engineered stone (Quartz) from its SEZ Unit situated at Mahindra World City, Sanganer, Jaipur. The quartz manufactured by Global Stones is intended for export. For this activity, Global Stones was granted the Letter of Approval ( LOA ) on 31.05.2017. 3. In order to set up its SEZ unit, Global Stones entered into a lease agreement with Mahindra World City (Jaipur) ( Mahindra ). As per the lease agreement between the two parties, Mahindra gave land on lease to Global Stones for a period of 90 years. In lieu of this, Global Stones paid an amount of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purposes of filing a refund claim by an SEZ unit/developer. Global Stones hereinunder submits that the said procedure has been properly complied by it: Sl. No. Requirement under the SEZ Refund Notification Compliance by Global Stones 1. The exemption/ refund must be in relation to services received by an SEZ unit/developer for use in its authorized operations. Condition satisfied, held in favour vide the OIA. 2. The claim for refund is filed before the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise in Form A-4. Yes, application enclosed at page 56 of the appeal memorandum. 3. The taxable value mentioned in the invoice, including service tax payable, has been paid to the person liable to pay the service tax thereon. Yes, lease premium and service tax paid by Global Stones to Mahindra and not disputed by the Department. 4. Refund claim is filed within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an SEZ. Further, Section 26(2) of the SEZ Act provides that Central Government may prescribe for the manner and the terms and conditions by which exemption shall be granted to the Developer. The term prescribed has been defined under Section 2(w) of the SEZ Act as prescribed by rules made by the Central Government under this Act. 18. Section 55(e) of the SEZ Act provides the Central Government with powers to make rules with respect to such exemption from payment of tax to an SEZ. 19. Accordingly, in the SEZ Rules, 2006, Rule 31, provide for an exemption from service tax to an SEZ unit on all services used for its authorized operations. 20. Hence, it is urged that by virtue of Rule 31 of the SEZ Rules, read with Section 26(e) and Section 51 of the SEZ Act, no service tax would be payable by Global Stones on services received by it as SEZ unit for its authorized operations. 21. It is further urged that the SEZ Act and the Rules have an overriding effect and no embargo against such exemption can be placed vide Notification under the Finance Act. This understanding has been confirmed in the following cases: i) Cognizant Technology Solutions India Pvt. Ltd., vs. Commis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [1955] 27 ITR 34 (SC) 26. In view of this, it is submitted that since the amount paid as lease premium was otherwise not taxable under the Finance Act, 1994, refund of service tax paid thereon would be admissible and retention of service tax by the Department would be improper. 27. Learned counsel further urges that the appellant have met all the conditions for grant of the refund as required by a SEZ unit/ developer. 28. Accordingly, learned Counsel for the appellant prayed for dismissing the appeal of the Revenue with consequential benefits. 29. Opposing the appeal of the appellant assessee, in support of the Revenue appeal, learned Authorised Representative for Revenue urges that the refund claim is not admissible on the following grounds:- (i) It appears that the appellant has not filed the refund claim on the quarterly basis. They have filed consolidated refund claim for the entire lease period which does not appear to be admissible in terms of para (III) (f) of the Notification No. 12/2013-ST dt. 01.07.2013. (ii) Further, the invoice No. 1009/2018 dt. 31.05.2017 does not have the address of the premises leased to the appellant i.e. Plot No. PA-010-006, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the statute provision laid down for sanctioning refund. Accordingly, learned Authorised Representative for the Revenue have prayed for appropriate relief in the matter. 30. Having considered the rival contentions, we find that the appellant assessee have rightly been sanctioned the refund claim by the Commissioner (Appeals) as lease premium have been paid for acquiring the lease of the premises in the Special Economic Zone, which is essential for carrying of the business activity of the appellant assessee. We further find that levy of service tax is exempt under the provision of the SEZ Act. Only the procedure for exemption is provided by way of refund. In this view of the matter, we hold that the Commissioner (Appeals) have erred in concluding that the amount of refund is disbursable on quarterly basis. 31. Accordingly, we allow the appeal of the appellant assessee and modify the impugned order-in-appeal to the effect that the whole amount of eligible refund shall be disbursed in one go to the appellant assessee with interest under Section 11BB as per Rules. We find no merit in the appeal by Revenue. 32. In view of our findings, we allow the appeal of the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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