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TMI Blog2024 (9) TMI 694X X X X Extracts X X X X X X X X Extracts X X X X ..... eived. The approval committee has approved the said service as 'specified services' vide letter No. MPSEZ/P&C/5/74/06/Vol.I dated 26.06.2009 as claimed by the claimant. 1.1 The scrutiny of claim revealed that the claimant is engaged in SEZ operations as well as DTA operations and other business, therefore, the service received cannot be considered as wholly consumed within SEZ unit and accordingly the adjudicating authority rejected the entire claim of Rs. 9,54,69,865/- vide OIO No. SD-02/Ref-13/NT/2015-16 dated 09.04.2015. 1.2 Being aggrieved with the above OIO, the claimant filed appeal before the Commissioner (Appeals-II), Ahmedabad. The Commissioner (A) has decided the appeal vide OIΑ No. AHM-SVTAX-000-APP-134-15-16 dated 29.01.2016 by allowing the appeal and setting aside impugned order. Therefore, the present appeal is filed by the Revenue. 2. Shri Mihir G Rayka, Learned Additional Commissioner (AR) appearing on behalf of the Revenue/Appellant reiterates the grounds appeal. 3. Shri Rahul Patel, Learned Chartered Accountant appearing on behalf of the Respondent/Assessee at the outset submits that the issue is no longer res-integra, as the same has been decide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e does not own or carry out any business other than SEZ operation and furnished the declaration as per condition Para 2(c) of the notification. He has also referred to letter dated 4-10-2012 of the Specified officer of APSEZ, Mundra as quoted above, directing the assessee to file the refund claim of Service Tax in terms of Para 2(c) of the notification. Revenue is of the view that the specified services used for authorized operation were not wholly consumed within the SEZ in terms of Explanation (iii) of Proviso to Para 2(a) of the notification. We find that as per Para 2(a) of notification, the exemption shall be provided by way of refund of Service Tax paid on the specified services received for the authorized operation in a SEZ. Proviso to Para 2(a) had given option where the specified services received and used for authorized operation are wholly consumed within the SEZ, the assessee may not pay the Service Tax. The learned Senior Advocate submits that they have not availed the option as per proviso to Para 2(a) and filed refund claim of Service Tax paid on the specified services. The contention of the Revenue is that the services were not wholly consumed within the SEZ and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness other than the business in SEZ. 17. There is a distinction between the expression "Sales in DTA" as referred in Rule 47 of SEZ Rules and the words "carry on any business other than operations in SEZ" and "sharing between authorised operation in SEZ Unit and DTA Unit" as referred in Para 2(a) and 2(d) of the notification. The word "business" is one of wide amplitude and it means an activity carried on continuously and systematically by a person by application of his labour or skill with a view to earning an income. The Hon'ble Supreme Court in the case of Commissioner of Income Tax, West Bengal v. Kolkata National Bank Ltd. - AIR 1959 SC 928, observed that the term "business" is of wide import and each case is to be determined with reference to particular kind of activity or occupation of the concerned person. In the present case, the assessee is engaged in authorized operation in SEZ as per approval of BOA. The surplus electricity supplied in DTA as per Rule 47 of SEZ Rules, which cannot be treated as a business. There is no material available on record that the assessee has a DTA Unit, it cannot be construed that the assessee is carrying out business other than operations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is clearly evident that Ministry of Commerce and Industry had approved supply of power in DTA. It is already observed that the supply of surplus power in DTA is not the business of assessee. Rule 47 of SEZ Rules permitted to transfer surplus power in DTA, which is within the purview of authorized operation. So, the contention of the learned Authorised Representative that the assessee supplied the power to DTA is beyond the authorized operation, cannot be accepted. 19. It is significant to note that mere supply of surplus power in DTA as mentioned in Rule 47 of SEZ Rules, cannot be construed that the assessee carries on business, as there is no DTA Unit of the assessee. Apart from that, SEZ, Mundra by letter, dated 4-10-2012, directed the assessee to claim refund in terms of Para 2(c) of the notification, then, rejection of refund claims considering under Para 2(d) of notification by the adjudicating authority is totally unwarranted and cannot be sustained. The Tribunal in the case of Tata Consultancy Services Ltd. v. CCE & S.T. (LTU), Mumbai - 2013 (29) S.T.R. 393 (Tri.-Mum.), held that once the Approval Committee has given the nexus and the justification, it was totally unwarran ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ub-section itself starts with the expression "subject to the provisions of this Chapter". Sub-section (4) of Section 85 itself contains the width of the power of the Commissioner (Appeals) in hearing the proceedings of appeal under Section 85. The scope of such powers flowing from sub-section 85(4) therefore, cannot be curtailed by any reference to sub-section (5) of Section 85 of the Finance Act, 1994." Thus, the Commissioner (Appeals) has power to remand the matter to the adjudicating authority for de novo decision. So, the appeals filed by the Revenue on both the grounds are liable to be rejected. RE : Appeals filed by the assessee : 21. The learned Senior Advocate on behalf of the assessee fairly submits that they are not contesting the direction of the Commissioner (Appeals) for verification of the documents by the adjudicating authority. He submits that the Commissioner (Appeals) rejected the refund claim on following issues :- S.N. Particulars Amount 1 M/s. Karnavati Aviation Pvt. Ltd. The Service of transport by air for domestic journey provided by is not covered under the approved service category of "Passengers embarking in India for International Jou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and correspondence made with SEZ authorities and Ministry of Commerce and Industries, passed the following order:- "15. We find that there is no dispute that the assessee fulfilled the condition of Para 2(b) of the notification, as the assessee obtained a list of taxable services as required for authorized operation approved by the Approval Committee of the concerned SEZ. The learned Senior Advocate submits that the assessee does not own or carry out any business other than SEZ operation and furnished the declaration as per condition Para 2(c) of the notification. He has also referred to letter dated 4-10-2012 of the Specified officer of APSEZ, Mundra as quoted above, directing the assessee to file the refund claim of Service Tax in terms of Para 2(c) of the notification. Revenue is of the view that the specified services used for authorized operation were not wholly consumed within the SEZ in terms of Explanation (iii) of Proviso to Para 2(a) of the notification. We find that as per Para 2(a) of notification, the exemption shall be provided by way of refund of Service Tax paid on the specified services received for the authorized operation in a SEZ. Proviso to Para 2(a) had giv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter dated 21-3-2012 dispensed with the condition of earning net foreign exchange in the assessee's case (generation of power within SEZ). This shows that the assessee is not required to earn foreign exchange as it would not be possible for the assessee to earn foreign exchange. Mere selling of surplus power in DTA and installing dedicated transmission lines into DTA would not mean that the assessee owns or carries on any business other than the business in SEZ. 17. There is a distinction between the expression "Sales in DTA" as referred in Rule 47 of SEZ Rules and the words "carry on any business other than operations in SEZ" and "sharing between authorised operation in SEZ Unit and DTA Unit" as referred in Para 2(a) and 2(d) of the notification. The word "business" is one of wide amplitude and it means an activity carried on continuously and systematically by a person by application of his labour or skill with a view to earning an income. The Hon'ble Supreme Court in the case of Commissioner of Income Tax, West Bengal v. Kolkata National Bank Ltd. - AIR 1959 SC 928, observed that the term "business" is of wide import and each case is to be determined with reference to particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authorised Representative. The expression "supply of power to Special Economic Zones (SEZs) and Export Oriented Units (EOUs) in Gujarat and other SEZs, EOUs and others" in Notification, dated 10-5-2007 would be read together and the plurality of word "Others" would indicate the other places, apart from SEZs and EOUs. The said notification notifies the area at Village Tunda and Siracha, Taluka Mundra for set up of SEZ. Thus, it is clearly evident that Ministry of Commerce and Industry had approved supply of power in DTA. It is already observed that the supply of surplus power in DTA is not the business of assessee. Rule 47 of SEZ Rules permitted to transfer surplus power in DTA, which is within the purview of authorized operation. So, the contention of the learned Authorised Representative that the assessee supplied the power to DTA is beyond the authorized operation, cannot be accepted. 19. It is significant to note that mere supply of surplus power in DTA as mentioned in Rule 47 of SEZ Rules, cannot be construed that the assessee carries on business, as there is no DTA Unit of the assessee. Apart from that, SEZ, Mundra by letter, dated 4-10-2012, directed the assessee to claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n on the Commissioner (Appeals) to remand a proceeding contained in Section 35A(3) of the Central Excise Act, 1944 must apply in the appeals under Section 85 of the Finance Act, 1994 also. This is so because, sub-section (5) of Section 85 though requires the Commissioner (Appeals) to follow the same procedure and exercise same powers in making orders under Section 85, as he does in the Central Excise Act, 1944 in appeals, this sub-section itself starts with the expression "subject to the provisions of this Chapter". Sub-section (4) of Section 85 itself contains the width of the power of the Commissioner (Appeals) in hearing the proceedings of appeal under Section 85. The scope of such powers flowing from sub-section 85(4) therefore, cannot be curtailed by any reference to sub-section (5) of Section 85 of the Finance Act, 1994." Thus, the Commissioner (Appeals) has power to remand the matter to the adjudicating authority for de novo decision. So, the appeals filed by the Revenue on both the grounds are liable to be rejected. RE : Appeals filed by the assessee : 21. The learned Senior Advocate on behalf of the assessee fairly submits that they are not contesting the direction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority, we find that this being a case of refund of service tax, clearly covered by the ratio of Hon'ble Gujarat High Court judgment in the case of Associated Hotels Limited (supra). In the said judgment, the Hon'ble High Court has also referred to the judgments of Hon'ble Supreme Court in the case of Mil India Limited vs. CCE, Noida - 2007 (210) ELT 188 (SC). Therefore, we are of the view that the learned Commissioner (Appeals) has power to remand the matter to the Adjudicating Authority, therefore, on this count also, Revenue's appeal does not sustain. 7. In view of the above judgment of this tribunal, the Revenue's appeals are not sustainable. Hence, we uphold the impugned orders. 8. Out of the five appeals, one Appeal No. ST/10133/2015 involve amount of Rs. 29,72,447/-. Therefore, this appeal is liable to be dismissed not only on merits but also on monetary limit as per Government's Litigation Policy issued vide F. No. 390/Misc/116/2017-JC dated 22.08.2019. All the appeals filed by Revenue are dismissed." In both the above decisions in the appellant's own case, issue involved in the present case has been elaborately addressed and held in favour of the respondent. Accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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