TMI Blog2021 (9) TMI 358X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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 in 1994. This Tribunal in M/S DLF ASSETS PVT. LTD. VERSUS THE COMMISSIONER, SERVICE TAX, DELHI I [ 2020 (11) TMI 35 - CESTAT NEW DELHI] , placed reliance upon the aforesaid decision of the Andhra Pradesh High Court in GMR Aerospace Engineering Ltd., and observed that the conditions set out in the notification dated March 3, 2009 were not required to be examined in view of the provisions of the SEZ Act - In MAST GLOBAL BUSINESS SERVICES INDIA PVT LTD VERSUS COMMISSIONER OF CENTRAL TAX, BANGALORE [ 2018 (9) TMI 258 - CESTAT BANGALORE] , the Tribunal held that the SEZ Act had an overriding effect, in view of the provisions of Section 51 of the SEZ Act, over all other laws and, therefore, the ground for rejecting the refund claims was not tenable in law and even otherwise, approval from UAC was only procedural in nature and not a mandatory condition. The finding of Commissioner (Appeals) that since ocean freight service has been included in the list of services with SEZ services authorities only on 27.11.2017 i.e. subsequent to their refund application, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur only) was sanctioned. 4. The appeals thereof has been rejected vide common Order-in-Appeal No.VIZ-EXCUS-001-APP-015-19-20 dated 30.05.2019. The said order has been assailed before this Tribunal. 5. I have heard Learned Counsel for the Appellant Shri P. Dwarakanath, and Shri A V L N Chary, AR for the Respondent. 6. It is submitted on behalf of appellant that appellant is an SEZ Unit. The chief contention of the Department for the part-rejection of the refund claim relates to service tax amount paid by the appellant on ocean freight services which is not included/covered under the approved list by the approval committee and hence not included in the appellant s approved list of services. In this regard, the appellants submit that the issue of ocean freight was covered under the negative list until 01.06.2016. Further, the Notification No. 09/2016-Service Tax dated 01.03.2016, air freight was included in Notification No. 25/2012-Service Tax dated 20.06.2012, (Mega Exemption Notification), however, service of ocean freight has become taxable from 01.06.2016. 7. Further, the issue of ocean freight had undergone tumultuous amounts of changes through various notifications ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mended 47(5) of SEZ Rules and has given decision in favour of the assessee. 12. After considering the rival contentions, the appeal record and the referred case laws, I observe and held as follows: The issue that arises for consideration in the appeal is about exemption from service tax on the services rendered to the SEZ units. According to the appellant, the impugned services were utilized for authorized operations by the recipient SEZ units, there was no necessity to pay any service tax. The Department, however, alleged that though the exemption provided under the SEZ Act is contained in the Notification dated March 3, 2009, but the service as that of ocean freight was not covered under the approved list. In order to appreciate the contentions advanced by Learned Counsel for the appellant and the Learned Authorized Representative of the Department, it will be appropriate to refer to the relevant provisions. Section 26 of the SEZ Act deals with exemptions, drawbacks and concessions to every Developer and entrepreneur. The relevant provisions are reproduced below : Exemptions, drawbacks and concessions 26. to every Developer and entrepreneur. Subject to the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... public interest so to do, hereby exempts the taxable services specified in clause (105) of section 65 of the said Finance Act, which are provided in relation to the authorised operations in a Special Economic Zone, and received by a developer or units of a Special Economic Zone, whether or not the said taxable services are provided inside the Special Economic Zone, from the whole of the service tax leviable thereon under section 66 of the said Finance Act : Provided that - (a) ********** (b) ********** (c) the exemption claimed by the developer or units of Special Economic Zone shall be provided by wav of refund of service tax paid on the specified services used in relation to the authorised operations in the Special Economic Zone : (d) ********** (g) ********** (f) ********** (g) ********** 2. Proviso (c) to the aforesaid Notification dated March 3, 2009 was amended by Notification dated May 20, 2009. The amended proviso (c) is reproduced below : the exemption claimed by the developer or (c) units of Special Economic Zone shall be provided by way of refund of service tax paid on the specified services used in relation to the authorised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rms and conditions subject to which the exemptions are to be granted under sub-section (1) of section 26 should be prescribed by the Rules made by the Central Government under the SEZ Rules, 2006 issued in exercise of the power conferred by section 55 of the SEZ Act . It is not necessary to extract rule 22, since there is no dispute about the fact (1) that the petitioners have complied with the prescriptions contained in rule 22 of the SEZ Rules, 2006, and (2) that rule 22 of the SEZ Rules, 2006 does not stipulate the filing of Forms A1 and A2 as prescribed in the three Notifications issued under section 93 of the Finance Act, 1994. 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. But this contention is unacceptable. 30.This is for the reason that section 26(1) of the SEZ Act made the entitlement to certain exemptions subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notification dated March 3, 2009 were not required to be examined in view of the provisions of the SEZ Act. The relevant portion of the decision is reproduced below: 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onditions imposed by the notifications issued under the provisions of the Finance Act are merely directory in nature. 14. This issue has been considered time and again. In Mast Global Business Services India Pvt. Ltd. v. Commissioner of Central Tax [2018- TIOL-3115-CESTAT-BANG], the Tribunal held that the SEZ Act had an overriding effect, in view of the provisions of Section 51 of the SEZ Act, over all other laws and, therefore, the ground for rejecting the refund claims was not tenable in law and even otherwise, approval from UAC was only procedural in nature and not a mandatory condition. The relevant portion of the decision of the Tribunal is reproduced below : The other grounds on which the refund claims have been rejected by the impugned order is that the appellant has not produced the approved list of specified input services from the UAC to SEZ which is a mandatory 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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