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TMI Blog2023 (9) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... re authorised under the SEZ Act and there is no allegation anywhere that any of the conditions laid down under Rule 31 have been violated. Whether there is any requirement of filing refund claim in same quarter under exemption Notification when the Service Tax itself was exempted by Section 26 ibid? - HELD THAT:- It is settled and can be safely said that availability of exemptions under Section 26 ibid would depend only upon the terms and conditions prescribed under the SEZ Act or Rules framed thereunder and cannot be restricted by the terms or conditions including limitation as prescribed in the notification - Since exemption from payment of service tax on taxable services rendered to a Developer or a Unit by any service provider shall be available for the authorized operations in a Special Economic Zone therefore the appellant, for those services, are not liable to pay any tax/duty as Article 265 of the Constitution of India specifically provides that no tax or duty can be either levied or collected except by authority of law - the genuineness or otherwise of the refund claims, after examining the invoices and other relevant documents, cannot be done at this stage as the sam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No.12/2013-ST dated 1.7.2013 with request letter for condonation of delay in submission of service tax refund application, which resulted in the issuance of the show cause notice dated 29.5.2018 proposing to reject the refund claims on various grounds including the ground of limitation and for some on the ground that since they have already filed the refund claim in respective quarters, therefore not eligible to claim refund in respect of invoices pertaining to those quarters. The said show cause notice culminated into the Order-in-Original dated 15.6.2018 rejecting the refund claims filed by the appellant which was upheld by the Commissioner (Appeals) vide impugned order dated 28.2.2019. 5. According to learned counsel since their software data was corrupted and its recovery took substantial time therefore there was delay in filing refund claims. He also submits that all the conditions mentioned in the notification (supra) have been satisfied by them and all the invoices, on which they have claimed refund, have been filed by them and the same have been verified also by the concerned authority. No doubt has been raised on the genuineness or otherwise of those invoices. Le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the relevant procedures relating to SEZs. In order to appreciate the contentions advanced by learned Counsel and learned Authorized Representative, it will be appropriate to refer the relevant provisions viz. Sections 26 51 of the SEZ Act and Rule 31 of SEZ Rules which are reproduced hereunder: 26. Exemptions, drawbacks and concessions to every Developer and entrepreneur. (1) Subject to the provisions of sub-section (2), every Developer and the entrepreneur shall be entitled to the following exemptions, drawbacks and concessions, namely : .. . (e) exemption from service tax under Chapter V of the Finance Act, 1994 (32 of 1994) on taxable services provided to a Developer or Unit to carry on the authorized operations in a Special Economic Zone; .. .. (2) The Central Government may prescribe the manner in which, and the terms and conditions subject to which, the exemptions, concessions, drawback or other benefits shall be granted to the Developer or entrepreneur under sub-section (1). Xxx xxx xxx 51. Act to have overriding effect. The provisions of this Act shall have effect no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r issue involved herein is whether there is any requirement of filing refund claim in same quarter under exemption Notification when the Service Tax itself was exempted by Section 26 ibid? According to me so far as the requirement of filing of refund under the exemption notification (supra) is concerned, the same is irrelevant as the exemption notification itself is not necessary when the service tax is exempted. The refund can be denied or service tax can be charged only if the service is not for authorised operations of the SEZ unit, which is not the case of department anywhere. This issue was also examined by the Hon ble High Court of Judicature at Hyderabad for the State of Telangana and State of Andhra Pradesh in the matter of GMR Aerospace Engineering Limited and another v. UOI Ors.; 2019 (31) G.S.T.L. 596 (A.P.) in which the second petitioner therein i.e. a Developer of GMR Hyderabad Aviation SEZ, entered into a sub-lease agreement with the first petitioner for rendering certain services. It, however, claimed exemption on the ground that under section 26(1)(e) ibid, every Developer was entitled to exemption from service tax under Chapter-V, Finance Act on taxable services ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner entered into a sub-lease agreement with the petitioner on 1-6- 2010, for rendering the services of lease of land, supply of electricity and supply of water and (6) that the services so rendered are by a Co-Developer to a Developer, which is a unit located in the SEZ. 18. In the light of the above admitted facts, the only question that arises for consideration is as to whether the availability of exemptions under Section 26 of the SEZ Act would depend not only upon the terms and conditions prescribed under Section 26(2), but also upon the terms and conditions prescribed in the notifications issued under various enactments such as Customs Act, 1962, Customs Tariff Act, 1975, Central Excise Act, 1944, Central Excise Tariff Act, 1985, Finance Act, 1994 and Central Sales Tax Act, 1956 etc., enlisted in clauses (a) to (g) of sub-section (1) of Section 26 of the Act. Xxx xxx xxx 23. As rightly pointed out by Sri S. Niranjan Reddy, Learned Senior Counsel appearing for the petitioner, the word prescribe appearing in sub-section (2) of Section 26 has to be understood with reference to the definition of the word prescribed appearing in Section 2(w) of the SEZ Act, 2005. Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 2(w) to mean the rules framed by the Central Government under the SEZ Act, 2005. The space is also not left unoccupied, as the Central Government has issued a set of Rules known as the Special Economic Zones Rules, 2006 , wherein the Central Government has prescribed the terms and conditions for grant of exemptions under Rule 22. Therefore, there is no question of comparing the terms and conditions prescribed in Rule 22 with the terms and conditions prescribed in the notifications issued under any one of five enactments listed in Section 26(1) to find out whether there was any inconsistency. Xxx xxx xxx 34. The benefit of exemptions granted under the notifications issued under Section 93 of the Finance Act, 1994, are available to any one and not necessarily confined to a unit in a special economic zone. Section 93 of the Finance Act, in that sense is a general power of exemption available in respect of all taxable services. But, Section 26(1) is a special power of exemption under a special enactment dealing with a unit in a special economic zone. Therefore, the notifications issued under Section 93 of the Finance Act, 1994 cannot be pressed into service for finding o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 and Finance Act, 1994), in the SEZ Act, the Parliament has explicitly resolved this inconsistency between the laws. Section 51 of the SEZ Act states that the provisions of SEZ Act override any other provisions of other laws 38. Thus, insofar as supplies for authorised operations of SEZ developers and units are concerned, Section 26 of the SEZ Act overrides the charging sections in all the three Acts. 39. The charging sections, having been overridden by the SEZ Act passed by the Parliament, no legal authority to levy and collect central excise duty, customs duty or service tax for goods or services supplied for authorised operations of SEZ developers and units covered by Section 26 remains. Without such a legal authority, no tax or duty can be either levied or collected in view of Article 265 of the Constitution of India. 40. Therefore, there is no need for any exemption notifications under any of these three Acts nor is it necessary to fulfil any conditions of any of the conditions laid down in exemption notifications, if any, issued for the purpose. Thus, the charge of excise duty under Section 3 of the Central Excise Act, the charge of Customs Duty under Section 12 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice tax levied by the 1994 Finance Act. We may only state that whichever judgments which are in appeal before us and have referred to and dealt with such notifications will have to be disregarded. Since the levy itself of service tax has been found to be non-existent, no question of any exemption would arise. With these observations, these appeals are disposed of. 42. The refunds in these appeals were also rejected by the impugned orders on a few other grounds which we now proceed to examine. It has been asserted that either the approval of the UAC was not obtained for the services at all or that it was obtained after the invoice for which the refund was claimed. The approval of the UAC for the input services is a requirement under the exemption notifications. As we have found that the exemption notifications themselves are redundant and that the exemption was available under Section 26 of the SEZ Act itself, this cannot be a ground for rejection of refund. Xxx xxx xxx 48. Thus, as the charge of service tax under the Finance Act, 1994 on the services provided for authorised operations of the appellant are overridden by section 51 of the SEZ Act, 2005, any exemption not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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