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TMI Blog2024 (3) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions of Notification No. 09/2009-S.T. are clearly repugnant and inapplicable. This is because Section 51 of the SEZ Act grants overriding power to the provisions of the SEZ Act. The appellant also contended that in terms of Notification No. 09/2009-S.T. exemption is granted by way of refund of Service Tax in situations where services are not wholly consumed in the SEZ. Whereas for the services which are wholly consumed in SEZ, the appellant need not pay service tax at all because the assessee is eligible for outright unconditional exemption for the services wholly consumed in the SEZ. This change was brought about by Notification No. 15/2009-S.T. dated 20.05.2009. If Service Tax is paid with respect of services which are wholly consumed within the SEZ, it would be the case of Service Tax wrongly paid, as no service tax is otherwise payable. In that case the refund claim of the assessee would not be covered by Notification No. 09/2009-S.T., but rather it would be covered under Section 83 of the Finance Act read with Section 11B of the Central Excise Act, 1944. In such a case the time period for filing the refund claim is one year and the appellant has filed the refund claim wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant had not furnished required documents to show that the services had been rendered inside the SEZ unit. 2.3 On appeal, the Ld. Commissioner (Appeals) vide Order-in-Appeal No. 79/ST/BBSR-II/2012 dated 09.10.2012 allowed the refund of Rs.2,63,732/- paid in respect of the two invoices raised by M/s. Gannon Dunkerley Co. Ltd. and M/s Brawny and rejected the refund of Rs.15,99,135/- on the ground that the same was barred by limitation. 3. Aggrieved against the impugned order, the appellant has filed this appeal. 4. The appellant submits that in terms of Section 26(1) of the Special Economic Zones Act, 2005 (hereinafter referred to as 'SEZ Act') read with Rule 31 of the Special Economic Zones Rules, 2005 (hereinafter referred to as 'SEZ Rules') exemption from Service Tax is available to services rendered to SEZ Units and developers for authorised operations; Section 51 of the SEZ act gives overriding effect to the SEZ act over any other legislations. 4.1 The appellant submits that there is no dispute about the fact that the services received by the appellant were used for authorized operations within the SEZ unit; the refund has been rejected only the ground of limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion No. 09/2009-S.T. dated 03.03.2009. The refund was rejected only on the ground of limitation as prescribed in paragraph 2(f) of Notification No. 09/2009-S.T. We observe that there is no dispute regarding the payment of Service Tax or utilization of services for authorized operations in the SEZ. The refund has been rejected only on the ground that the claim has not been filed within the time limit prescribed in the notification. Thus, the issue to be decided here is whether the time limit prescribed under the notification is applicable in respect of the refund application filed by a unit located within the SEZ area. 7.1. The appellant contends that the SEZ Act, being a specialized act, is having overriding effect over any other act. Accordingly, it is their contention that a notification issued under Service Tax cannot restrict or provide a time-limit for grant of refund of Service Tax which is not payable under the SEZ Act. 7.2 We find that the contention raised by the appellant has been considered by the Tribunal, New Delhi in the case of M/s. SRF Ltd. (supra) wherein the Tribunal observed as under: - 37. Thus, Section 26(1) of the SEZ Act is inconsistent with the three chargi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er 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 notifications for such services as well as the conditions laid down in them are redundant. Service tax, if any, paid on such input services for authorised operations need to be refunded to the appellant. We also find no force in the other grounds raised for denying the refund of service tax paid and discussed above. 49. The denial of refund of service tax to the appellant in these five appeals is not sustainable and, accordingly, we find that appeals need to be allowed and the impugned orders need to be set aside . 7.3 This view was also taken in the case of DLF Assets Pvt. Ltd. (supra) wherein it has been held as under: - 18. The contention advanced by the Learned Counsel for the appellant has force. As noticed above, Section 26(1) of the SEZ Act provides that subject to the provisions of the sub-section (2), every Developer shall be entitled to exemptions and the exemption at (e) exempts every Developer from service tax under Chapter-V of the Finance Act on taxable services provided to a Developer or unit to carry on the aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of the revenue that the appellant is not eligible to make such claims. Their only objection is to the claim being filed beyond the period of one year as per the notification. We are of the considered opinion that once the appellant is found to be eligible to claim the refund, the substantive conditions are complied with and the condition of time limit for making the claim under the notification being only a procedural requirement, needs to be construed liberally. Considering the beneficial object of establishing the SEZ tax free, without any burden of duties, the procedural lapse, if any, cannot be the basis to deny the refund to the appellant. The exemption is intended to be absolute is further evident from para 3 (11) of the Notification which provides for ab-initio exemption. This strengthens our conclusion that the SEZ Act and the Rules read with the notification is intended to be a beneficial policy for the SEZ, therefore has to be construed liberally. In our view we are supported by the decision of the Apex Court in Government of Kerala Anr. Vs. Mother Superior Adoration Convent (supra), where it has been held that the beneficial purpose of the exemption must be given ful ..... X X X X Extracts X X X X X X X X Extracts X X X X
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