9911796707
TMI Blog2021 (3) TMI 681X X X X Extracts X X X X X X X X Extracts X X X X ..... re exempted from the whole of the service tax, education cess and secondary and higher education cess leviable thereon. The said exemption is provided in 2 ways, viz, one by way of refund of service tax paid on the specified services received by a unit located in a SEZ or the developer of SEZ and used for the authorized operations and the other is by way of not paying service tax ab initio. Among the two, the appellant had chosen the option of getting exemption by way of refund. Accordingly, they filed the impugned refund claims for the periods July 2016 to September 2016 and October 2016 to December 2016 respectively. Vide the above claims, they had claimed refund of service tax paid on various services such as Business Auxiliary Service, Business Support Service, Management Consultancy Service, Banking & Financial Service, etc., which were claimed as received and exclusively used for authorized operations, service tax paid under Reverse charge mechanism and Service tax paid by their head Office and distributed to them through Input Service Distributor Invoices. After verification of the claim, the original authority partially rejected the claim for the period July 2016 to Septemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribed in the Notification. When the appellant is eligible to avail credit as per Rule 7 by way of distribution of credit, the same cannot be denied stating that there is delay in filing the refund claim. It is also pointed out by him that the said clause in the notification also grants powers to condone the delay and the same ought to have been condoned. When substantive conditions are satisfied, the procedural delay ought to have been condoned by the department. 2.2 Further, the exemption granted flows from Section 26 of SEZ Act, 2005. Section 51 of the said Act provides that SEZ Act would override all other enactments. Therefore, the conditions prescribed in the notifications cannot be applied to frustrate the grant of refund. He relied upon the decision in the case of GMR Aerospace Engineering Limited and another Vs UOI and others reported in 2019 (8) TMI 748 Telegana and Andhra Pradesh High Court to argue that the Hon'ble High Court had analysed the very same issue with regard to the exemption granted to SEZ unit. It was held that the notifications issued under Section 93 of Finance Act cannot be pressed into service for finding whether unit in a SEZ qualifies for exemption or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther, refund ought to be granted as the exemption flows from Section 26 of SEZ Act. He prayed that appeals may be allowed. 3. Ld. A.R supported the findings in the impugned order. 4. I have heard the argument put forward by both sides and perused the records carefully. The foremost argument put forward by the Ld. Counsel is that appellant unit being a SEZ unit is exempted from payment of taxes / duties under Section 26 of the SEZ Act. The issue whether conditions imposed as per Notification issued under Section 93 of the Finance Act would prevail over Section 26 of SEZ Act so as to deny the exemption from tax was considered by the Hon'ble High Court in the case of GMR Aerospace Engineering Ltd. (supra). The Hon'ble High Court observed as under : "16. That takes us to the main contention revolving around the SEZ Act, 2005, SEZ Rules, 2006, Finance Act 1994 and the notifications issued by the Government. Before looking at the interplay of all these, it may be useful to first take note of the scheme of the Act. The broad scheme and the features of the SEZ Act, 2005 was taken note of by a Division Bench of the Madras High Court to which one of us (VRSJ) was a party, in Nokia India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment. 21. Section 30 of the Central Act makes any goods removed from a Special Economic Zone to the Domestic Tariff Area, chargeable to duties of customs including anti-dumping, countervailing and safeguard duties. It will be of interest to note that Section 30 of the Central Enactment is exactly identical to Section 15 of the TNSEZ Act, 2005. 22. Section 50 of the Central Enactment empowers the State Government, to notify policies for developers and units and also to take suitable steps for enactment of any law, for the purposes of giving effect to the provisions of this Act. The reason as to why the Central Enactment empowers the State Government to enact a law, is that in respect of taxes, levies and duties that could be imposed only by the State Government, by virtue of the relevant entries in List II of the VII Schedule to The Constitution, the Central Government is not competent to grant exemption. Therefore, while the Central Enactment provides for exemption to the units located in SEZs created thereunder, only in respect of the taxes, levies and duties that can be imposed by the Central Government, a State Enactment alone can provide for exemption from payment of taxe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons and (2) is deemed to be a port, in land container depot, land stations and land customs station under Section 7 of the Customs Act, 1962. This is by virtue of Section 53 of SEZ Act, 2005. Keeping this core concept in mind, let us now go to the provisions of the Act. Section 7 of the Act exempts from payment of taxes, duties or cess, under all enactments specified in the First Schedule, any goods or services exported out of or imported into or procured from Domestic Tariff Area, by a unit in a SEZ or a developer. But Finance Act, 1994 is not one of the enactments specified in the First Schedule. Therefore, Section 7 has no application to the case on hand. .... .... .... .... 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. Section 2(w) of the Act reads as follows : "prescribed" means prescribed by rules made by the Central Government under this Act." 24. Therefore, the terms and conditions subject to which the exemptions are to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 93 of the Finance Act, 1994, if the conditions stipulated in those notifications are fulfilled. 28. The SEZ Act, 2005 is also a parliamentary enactment issued later in point of time to the Finance Act, 1994 and Section 51 of the Act declares that the provisions of the SEZ Act, 2005 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 51 reads as follows : "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." 29. The contention of Smt. Sundari R. Pisupati, Learned Senior Standing Counsel is that there is no inconsistency between (i) the terms and conditions prescribed in the notifications issued under Section 93 of the Finance Act, 1994 and (ii) the terms and conditions prescribed in Rules 22 and 31 of the SEZ Rules, 2006, and that therefore, Section 51 of the SEZ Act, 2005 cannot be pressed into service. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 out whether a unit in a SEZ qualifies for exemption or not." 5. In the case of Cybercam Datamotive Information Ltd. - 2018-TIOL-410-CESTAT Mumbai, the above decision was followed by the Tribunal holding that conditions prescribed in the notification cannot be applied so as to deny the refund when substantial conditions prescribed in the SEZ Act have been fulfilled. As per SEZ Act, when the service has been used for authorized operations exemption would be eligible. 6. For these reasons, I find that rejection of refund claim stating that refund is time-barred as well as the classification of services is different or that the services are not specified services cannot sustain and requires to be set aside, which I hereby do. 7. An amount of Rs. 9,841/- has been rejected being refund of SBC and KKC. On perusal of the records, it is seen that all these invoices are prior to 2016. The am ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
