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TMI Blog2022 (8) TMI 1557X X X X Extracts X X X X X X X X Extracts X X X X ..... the developer, the refund claim made as per Notification No. 12/2013 could not have been denied just for the reason that at the time of receipt of services, there was no approval of Approval Committee cannot be upheld. Appeal allowed. - Hon ble Mr. Sanjiv Srivastava, Member (Technical) For the Appellant : Shri Manoj Chauhan, Chartered Accountant. For the Respondent : Shri Prabhakar Sharma, Superintendent, Authorised Representative. ORDER This appeal has been directed against order-in-appeal No. NGP/EXCUS/000/APPL/440/15-16 dated 27.11.2015 passed by the Commissioner of Central Excise Customs (Appeals), Nagpur. By the impugned order, the Commissioner (Appeals) has held as follows:- 22. The relevant date for refund is the date of provision of services and can in no way be taken as the date of filing of refund claim. 1 find that the approval was granted by the Development Commissioner, SEEPZ-SEZ, Mumbai on 27.08.2010 whereas the services were received prior to the approval by the competent authority. It was necessary for the appellant to comply with the conditions stipulated in the notification to avail the benefit of the said notification, which I find the appellant failed to do s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equire the approval from the Approval Committee to be obtained prior to providing the services in question. It also noted that the refund claimed therein had been filed after approval was granted by the Approval Committee. This was held to be sufficient compliance with the requirements of Notification No. 9/2009. The appellant before the Tribunal had also raised a contention that the conditions of Notification No. 9/2009 were similar to the conditions in Notification No. 12/2013. We find that the impugned order of the Tribunal does not consider the latter contention raised by the appellant for if that contention were to be accepted by the Tribunal, it either ought to have followed its earlier view in Mahindra Engineering Services Ltd. (supra) or if it was not inclined to do so, it ought to have referred the question to a Larger Bench as held in Mercedes Benz (India) Pvt. Ltd. (supra). Even otherwise we find that merely because a particular argument was not raised when the earlier proceedings were decided would not be a sufficient ground to disregard an earlier adjudication made on merits. It would be open for the Tribunal in subsequent proceedings to doubt the correctness of the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom service tax. ● This issue has been considered by this Tribunal vis- -vis the same exemption notification in the following cases and the Tribunal has held in favour of the appellant:- ⮚ Se Forge Ltd. [2019 (365) ELT 560 (Tri.-Chennai)] ⮚ Wabco India Ltd. [2021 (54) GSTL 37 (Tri.-Chennai)] ⮚ Divis Laboratories Ltd. [2021 (54) GSTL 400 (Tri.- Hyd.)] ⮚ Lowe s Services India Pvt. Ltd. [2021 (3) TMI 230 CESTAT Bangalore] ⮚ EYGBS (India) LLP [2022 (4) TMI 1208 CESTAT Bangalore ● The only ground for denial of the refund claim is for the reason that the services against which service tax was paid by the appellant and claimed as refund were not approved by the Approval Committee as required. However, subsequently at the time of refund claim all such services have been approved. ● In view of the settled position in law vis- -vis the same notification and the decisions, the appeal be allowed. 3.3 Arguing for the Revenue, learned AR submits that:- ● Notification No. 12/2013 and Notification No. 09/2009-ST dated 03.03.2009 are distinctly different from each other and hence the Tribunal was justified in dismissing the appeal in the ea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion by way of 'ab initio exemption from payment of Service Tax' but not get approval by the Approval Committee of the list of services (referred to as specified services) as are required for the authorized operations which is one of the mandatory condition for claiming exemption. In such situation, Service Tax liability would arise as per the point of taxation rule and non payment of the same, under the belief that approval from the approval committee would be subsequently taken, would be an illegality at least for the period till approval is not granted. Therefore, the term 'following manner' has been used in the notification purposely to avoid or prevent such situation. Further, also with a view to maintain discipline in such exemption matter, this manner of procedure is applied in both cases of exemptions and is applied mandatorily. (B) The conditions mentioned under the notifications (09/2009) are applicable on the issue of refund of Service Tax only. Although, it cannot be inferred that any kind of manner or sequence is to be followed while claiming refund if all conditions are fulfilled, it appears to be logical to get an approval of specified service from ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on (2), every Developer and the entrepreneur shall be entitled to the following exemptions, drawbacks and concessions, namely :- (a) xx xx xx (b) xx xx xx (c) xx xx xx (d) xx xx xx (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; (f) xx xx xx (g) xx xx xx (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). Section 51 of the SEZ Act further provides overriding effect to the provisions of the SEZ Act and it is reproduced below : 51. Act to have overriding effect. - 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. Section 55 of the SEZ Act gives power to the Central Government to make rules for carrying out the provisions of the Act. In exercise of the aforesaid powers, the Cent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 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 authorized operations in a SEZ. Section 51 of the SEZ Act provides for an overriding effect to the provisions of the SEZ Act. The provisions of Section 26 read with Rule 31 of the SEZ Rules thus, have overriding effect over anything inconsistent contained in any other law for the time being in force, which would include the Finance Act. It needs to be noted that the Notification dated March 3, 2009 has been issued in exercise of the powers conferred by Section 93 of the Finance Act. Thus, when the services rendered by the appellant are fully exempted from service tax in terms of the provisions of the SEZ Act, the condition of exemption by way of refund imposed under the Notification issued under the Finance Act would be inconsistent with the provisions of the SEZ Act. It also needs to be noted that the SEZ Act was enacted in 2005, much after the enactment of the Finance Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... else other than the provisions of sub-section (2). Therefore, the firth respondent cannot read section 26(1) to mean that the exemptions listed therein are (1) subject to the provisions of sub-section (2) of section 26, and (2) also subject to the terms and conditions prescribed in the Customs Act, 1962, the Customs Tariff Act, 1975, the Central Excise Act, 1944, the Central Excise Tariff Act, 1985 and the Finance Act, 1994. This is especially so, since the authority of the Central Government to prescribe the terms and conditions subject to which exemptions may be granted under section 26(1), flows only out of sub-section (2) of section 26. The word prescribe is verb. Generally no enactment defines the word prescribe but the SEZ Act, 2005 defines the word prescribe under 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 prescrib ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oted that the SEZ Act was enacted in 2005, much after the enactment of the Finance Act in 1994. 21. Thus, what follows is that the Commissioner was not justified in examining whether the conditions set out in the Notification dated March 3, 2009 were satisfied or not for grant of any exemption from service tax. Section 26(2) of the SEZ Act does provide that the Central Government may prescribe the manner in which, and the terms and conditions subject to which, the exemptions shall be granted to the Developer under sub-section (1) but what is important to notice, and as was also observed by the Andhra Pradesh High Court, the word prescribe would mean prescribed by rules made by the Central Government under the SEZ Act, in view of the definition of prescribed under section 2(w) of the SEZ Act. The Notification dated March 3, 2009, which has been issued under section 93 of the Finance Act, therefore, has no application. 13. Learned Authorized Representative of the Department has, however, placed reliance upon sub-rule (5) of Rule 47 of the SEZ Rules that was inserted w.e.f. August 5, 2016 to contend that the aforesaid two notifications issued under Finance Act would be applicable. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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. 15. It was also held 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 appellant being SEZ is entitled to refund of Service Tax paid on input service used for authorized operations. Further, I find that as per Notification No. 12/2013-S.T., dated 1-7-2013, the only requirement is that the appellant is required to file the list of approved services which have been used by them for authorized operations. Further, in this case, I find that the appellant has subsequently obtained the approval from the Unit Approval Committee of the SEZ and the said certificate is placed on record but the Commissioner (A) has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Tax, Delhi-I reported in 2020 (11) TMI 35-CESTAT NEW DELHI. It was held that the conditions of the notification cannot be pressed into application to deny the refund to a SEZ Unit. Para 21 of the said decision reads as under :- Thus, what follows is that the Commissioner was not justified in examining whether the conditions set out in the Notification dated March 3, 2009 were satisfied or not for grant of any exemption from service tax Section 26(2) of the SEZ Act does provide that the Central Government may prescribe the manner in which, and the terms and conditions subject to which, the exemptions shall be granted to the Developer under sub-section (1) but what is important to notice, and as was also observed by the Andhra Pradesh High Court, the word prescribe would mean prescribed by rules made by the Central Government under the SEZ Act, in view of the definition of prescribed under section 2(w) of the SEZ Act. The Notification dated March 3, 2000, which has been issued under section 93 of the Finance Act, therefore, has no application. This Tribunal in the case of M/s. ATC Tyres Pvt. Ltd. v. Commissioner of GST CE, Tirunelveli reported in 2021-VIL-106-CESTAT-CHE-ST had co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellants have obtained approval for the said services, we find that the error would only be a procedural infraction which can be condoned. The substantive benefit cannot be denied for a procedural lapse. The claim of Rs. 967/- being given up by appellant is not considered in this appeal. In the case of EYGBS (India) LLP (supra), the Tribunal has observed as follows:- 5. I have considered the rival contentions and have gone through the orders relied upon during the course of arguments; and I am prima facie convinced that the Revenue has not denied the fact that the services in question were used by the SEZ unit for its authorized operations. Hence, the denial of refund for want of documents is not sustainable. 6.1 The Learned Bangalore Bench of the CESTAT in the case of M/s. Mast Global Business Services India Pvt. Ltd. (supra) has considered the case of a similarly placed taxpayer and held as under: 6.1 After considering the submissions of both sides and perusal of material on record, I find that the show cause notices were issued on two grounds viz. certain input services are not covered in the definition of input service under Rule 2(l) of CENVAT Credit Rules and hence not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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