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TMI Blog2023 (9) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... early lays down that No taxes can be levied without the authority of law. When the developer of SEZ and units located in the SEZ have been given exemption from payment of all the taxes then any levy and collection of the taxes from such units is without any authority in law and thus contravenes the Article 265. In such a scenario, the amount so collected needs to be refunded to the person from whom such tax has been collected. In the present case revenue has not disputed the receipt of these services by the SEZ Unit, hence denial of the refund claim in respect of these three services for the reason that they did not find mention in the list of specified services approved by the SEZ authority cannot be upheld. The issue involved in the present appeal is no longer res-integra. Similar view has been expressed by the tribunal in M/S. METLIFE GLOBAL OPERATIONS SUPPORT CENTER PRIVATE LIMITED VERSUS COMMISSIONER, SERVICE TAX [ 2020 (12) TMI 1069 - CESTAT NEW DELHI] where it was held that Learned counsel for the appellant submitted the substantive benefit of the service tax exemption provided under section 26 of the SEZ Act and rule 31 of the SEZ Rules cannot be denied by any pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.4 A show cause notice dated 27.07.2011 was issued to the appellant asking them to show cause as to why the refund claim be not rejected. After considering the submissions made by the appellant Assistant Commissioner has vide his order in original referred in para 1 held as follows: Order i) I sanction the claim of service tax to the extent of Rs 1,26,233/- filed by M/s EXL Services BPO Solutions (P) Limited, Ground Floor to Third Floor, Oxygen Complex Tower B Aachivis SEZ, Plot No 7 Sector 144 Noida, on 23.03.2011 under Notification No 09/2009 - Service Tax dated 03.03.2009 accordingly, cheque no 490383 dated 11.04.2012 for Rs 1,26,233/- (Rupees One Lac Twenty Six Thousand Two Hundred and Thirty Three only) is enclosed herewith. ii) I reject the claim of service tax to the extent of Rs 20,08,913/- filed by M/s EXL Services BPO Solutions (P) Limited, Ground Floor to Third Floor, Oxygen Complex Tower B Aachivis SEZ, Plot No 7 Sector 144 Noida, on 23.03.2011 under Notification No 09/2009 - Service Tax dated 03.03.2009 on the ground mentioned herein above. 2.5 Aggrieved by the above order appellant preferred appeal before Commissioner (Appeal), who has by the im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oned in the list of services, approved by the SEZ Authority, cane be treated as included under General Insurance Service, which appears in the list of approved services by the authority. If so whether the refund claim in respect of Insurance Auxiliary service is admissible. 4.2 I will take up the first issue. I agree that in the SCN, the allegations mentioned as Sl No (ii) to (iv) have not be explicitly mentioned nor they have been discussed in the SCN, but the SCN has show caused the appellant using the following lines ....as to why the refund claim to the extent of Rs 21,35,146/- should not be rejected under notification no 9/2009 dated 03/03.2009. For the sake of clarity the Notification No 9/2009 dated 03/03/2009 is reproduced as under: The impugned order on the basis of the above referred conditions, has denied the refund claim of Rs. 20,08,913/- as alleged at sl no (ii) to (iv) of the para 4.1. My view in this regard is that the SCN has show caused for violation of the notf no 9/2009 dated 03/03/2009 which contains the aforesaid mentioned two conditions. Therefore it is not mandatory that allegation should be first explicitly be detailed in the SCN only th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e substantive, mandatory based on consideration of policy non observance of it, may jeopardize the very purpose of providing such relief. Therefore the ratio of judgment of the Mangalore Chemical Fertilizers limited vs deputy Commissioner [1991 (55) ELT 437 (SC)] to that extent is applicable in this case. Hence I am in conformity with the opinion of the adjudication authority. 4.4 The proviso (a) of the notification No 9/2009-ST states the developer or units of Special Economic Zone shall get the list of services specified in clause (105) of section 65 of the said Finance Act as are required in relation to the authorized operations in the Special Economic Zone, approved from the Approval Committee (hereinafter referred to as the specified services) . The appellant was required to submit its list of input services which it wanted to be approved. The appellant such lists vide its letter dated 10/06/2010. The NSEZ authorities approved the default list of the services consumed inside the zone as well as outside the zone, vide letter dated 23.02.2011. The list contains the Scientific Technology Consultancy Services Customs House Agent Services. The adjudicating authority has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in their appeal have themselves stated that by clerical mistake they mentioned the employee medical insurance as Insurance Auxiliary Service. The fact that the refund claim was sought in respect of Insurance Auxiliary service is clear from the above quoted submission of the appellant. In such a scenario the decision taken by the adjudicating authority, in terms of condition no 2 (g) the refund claim shall be accompanied by the following documents, namely:- (i) a copy of the list of specified services required in relation to the authorized operations in the Special Economic Zone as approved by the Approval Committee . Further it remains a fact that the insurance auxiliary service did not find place in the default list. Hence the refund claim of the service tax paid on insurance auxiliary service is not admissible. 4.3 It is settled law that the show cause notice should contain the specific allegation and mere mention of notification number will not suffice. Reference is made to following decisions of the Hon ble Apex Court. A. Ballarpur Industries Ltd. [2007 (215) ELT 489 (SC)] 21. . However, it is made clear that Rule 7 of the Valuation Rules, 1975 will n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unit is not disputed the denial of refund of service tax paid on any service received by such unit would be contrary to the provisions of Article 265 of the Constitution. In the present case revenue has not disputed the receipt of these services by the SEZ Unit, hence denial of the refund claim in respect of these three services for the reason that they did not find mention in the list of specified services approved by the SEZ authority cannot be upheld. 4.5 We also find that the issue involved in the present appeal is no longer res-integra. Similar view has been expressed by the tribunal in following cases A. In case of Metlife Global Operations Support Center (P) Ltd. [2021 (46) GSTL 418 (T-Del)] following has been held: 40. This issue relates to proviso (a) of the notification dated March 3, 2009. It provides that the Developer or Units of SEZ shall get the list of services specified in Section 65(105) of the Finance Act as are required in relation to the authorized operations in the SEZ, approved from the UAC. 41. It has been pointed out by Learned Counsel for the appellant that the output services rendered by the SEZ unit of the appellant were only for autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atory condition as per the Commissioner (Appeals). In reply to this argument, the Learned Counsel submitted that in view of the settled legal position by various decisions relied upon by him, condition in respect of approval from UAC of SEZ is not a mandatory requirement as the SEZ Act vide Section 51 of SEZ Act will have overriding effect over the provisions of any other law. Therefore, keeping in view, the intention of the Government in enacting the SEZ Act and giving special fiscal concessions to SEZs, I am of the considered opinion that this is only a procedural and is not a mandatory condition as held by the Commissioner (Appeals). Further the decisions relied upon by the appellant clearly hold that the SEZ Act has a overriding effect over other laws. Therefore, this ground on the basis of which refund claims have been rejected is not tenable in law. (emphasis supplied) 46. In M/s. ONGC Mangalore Petrochemicals Limited v. Commissioner of Central Excise Central Tax, Mangalore Commissionerate [2019-VIL-140-CESTAT-BLR-ST], the Tribunal again held : 6. After considering the submissions of both the parties and perusal of the material on record, I find that the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... SEZ, provided the developer or units of SEZ shall get the list of services which are required in relation to the authorised operations approved from the Approval Committee. The appellant although requested for approval of 106 services initially, the Assistant Commissioner had approved only 37 services which was only default list or rather a general list applicable to all SEZ. It is seen that Development Commissioner has approved the list including Renting of Immovable Property Services vide letter dated 15-9-2009. It is not disputed that Renting of Immovable Property Service was availed by the appellant for the disputed period. The invoices shows the payment of service tax on such services. The Approval Committee has approved such services vide their letter dated 15-9-2009. The requisite for obtaining approval is only a procedure to be complied with, for the substantive benefit of exemption from payment of service tax. When the services have been approved, the benefit of exemption cannot be denied. Section 26 of the SEZ Act, lays down provisions for exemption from duties and taxes. Section 51 of the said Act provides for overriding effect. Therefore the immunity provided from paid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rations in a Special Economic Zone; 37. Thus, Section 26(1) of the SEZ Act is inconsistent with the three charging sections viz., Section 3 of the Central Excise Act, 1944, Section 12 of the Customs Act, 1962 and Sections 66, 66A and 66B of Chapter V of the Finance Act, 1994. In addition to the general principle of a specific law (pertaining to SEZ) prevailing over the general law (levying customs, central excise or service tax) and the later enactment (such SEZ Act, 2005) prevailing over the earlier enactments (Central Excise Act, 1944, Customs Act, 1962 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. It reads as follows : 51.(1) The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. 38. Thus, insofar as supplies for authorised operations of SEZ developers and units are concerned, Section 26 of the SEZ Act overrides the charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o 31st March 2013 had availed of exemption against form A-I which, having been dated only on 29th August 2012, precluded the privilege between 1st July 2012 and 28th August 2012 during which taxable service valued at ₹ 12,92,07,189 was rendered without discharging liability of ₹ 1,59,70,009. In sum, the recovery of ₹ 11,59,10,135 was ordered on account of breach of condition in the respective notifications embodying the procedure by which the appellant could have availed exemption from service tax on supply of services to units in Special Economic Zones (SEZ). . 6. The issue to be decided on this appeal is plain and simple enough: whether the notifications relied upon by the adjudicating authority can invalidate exemption accorded under : 26. (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 : - (a) exemption from any duty of customs, under the Customs Act, 1962 or the Custom Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or service provided in, a Special Economic Zone or a Unit, to c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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