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TMI Blog2023 (3) TMI 1122X X X X Extracts X X X X X X X X Extracts X X X X ..... ) vide order dated 16.09.2020. Hence the appellant has filed the present appeal before this Tribunal. 3. Briefly stated, the appellant is engaged in the manufacture and export of pharmaceutical products at their unit in SEZ, Pithampur, having Letter of Approval (LA) for undertaking authorised operations within SEZ at Pithampur. The head office of the appellant is in Mumbai which has been registered as Input Service Distributor (ISD). Under Notification No. 12/2013-ST dated 01.07.2013, the appellant filed two applications in Form A-4 claiming refund of service tax paid on input services received in SEZ unit, i.e. i) on 10.10.2017 for a sum of Rs 17,61,17,668/ for the period January 2017 to March 2017 and ii) on 28.03.2018 for a sum of Rs 95,02,081/ for the period April 2017 to June 2017. 4. The adjudicating authority vide order dated 12.03.2019 sanctioned the refund of Rs. 12,39,33,099/- for the period January 2017 to March 2017 and rejected the remaining claim of Rs. 5,21,62,728/- being time barred. Similarly, for the period April 2017 to June 2017 the adjudicating authority sanctioned the refund of 44,64,081/- towards service tax paid on the specified services used for autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) ELT 417 (SC), and Commissioner of C. Ex. Trichy Vs. Rukmani Pakkwell Traders -2004 (165) ELT 481 (SC), he relied on the general principles of interpretation of the exemption notification, to say that it has to be construed strictly and also pleaded the doctrine of approbation and reprobation. On the issue of delay, he submitted that it is a matter of discretion and the Tribunal should not interfere unless the order is arbitrary, capricious or unjust and relied on Sonali Steels & Alloys (P) Ltd., Vs. Union of India -2000 (123) ELT 493 (Mad.), Goyal Traders Vs. Commr. of C. Ex., & Cus. Ahmedabad -2001 (136) ELT 1401 (Tri. Mumbai) and Bombay Pharma Products Vs. Collector of Customs, Bombay - 1988 (34) ELT 691 (Tri.). In the written submissions filed by the revenue, it is submitted that the impugned notification having been declared as non-existent in the case of GMR (supra) and in SRF (supra), the present appeal needs to be dismissed. 8. Before examining the case on merits, we need to peruse the observations made by the Tribunal while remanding the matter to the adjudicating authority. Para 6 of the order dated 09.12.2019 is in following terms: "6. The bare perusal makes it clea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant referred to the applicability of limitation only to a case where payment was required to be made by the SEZ unit to the service provider but where payment was made by the ISD to the service provider, the time limit of one year would not apply. The adjudicating authority fell in error in arriving at the conclusion that under Para 3(III)(e) of the Notification the relevant date should be the actual payment by the ISD to the service provider and neither the date of invoice of ISD nor the date of payment by the SEZ unit to its Head office, i.e. ISD can be taken note of. Therefore, the adjudicating authority proceeded to justify its earlier order by quoting the paras from there and concluded: "14.6. In view of the above reproduced paras of the two original adjudication orders, I find it pertinent to mention that the date of actual payment of service tax by the ISD to the service providers was and is available on record. Therefore, in accordance with Para 3(III)(e) of Notification No. 12/2013-ST dated 01.07.2013 time limit of one year was calculated from the end of the month in which actual payment of service tax was made by the ISD to the registered service provider. I find that I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us of the scope of the remand order and the order passed in the present case on 19.12.2019, however keeping in view the law as enunciated by the various decisions of the High Court and the Tribunal, we find that the issue is no longer res-integra and the present controversy stands settled. 13. Before referring to the case laws we would like to refer to the relevant provisions of the Notification under consideration:- "3. This exemption shall be given effect to in the following manner: (I) The SEZ Unit or the Developer shall get an approval by the Approval Committee of the list of the services as are required for the authorised operations (referred to as the 'specified services' elsewhere in the notification) on which the SEZ Unit or Developer wish to claim exemption from service tax. (II) The ab-initio exemption on the specified services received by the SEZ Unit or the Developer and used exclusively for the authorised operation shall be allowed subject to the following procedure and conditions, namely:- (a) the SEZ Unit or the Developer shall furnish a declaration in Form A-1, verified by the Specified Officer of the SEZ, along with the list of specified services in terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1944 (1 of 1944) or the rules made thereunder, or the said Act or the rules made thereunder, shall file the claim for refund to the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, the as the case may be, in Form A-4; (d) the amount indicated in the invoice, bill or, as the case may be, challan, on the basis of which this refund is being claimed, including the service tax payable thereon shall have been paid to the person liable to pay the service tax thereon, or as the case may be, the amount of service tax payable under reverse charge shall have been paid under the provisions of the said Act; (e) the claim for refund shall be filed within one year from the end of the month in which actual payment of service tax was made by such Developer or SEZ Unit to the registered service provider or such extended period as the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, shall permit; ---- ------ ------ ---- FORM A-4 [Refer condition at S.No.3 (III)(c)] Application for claiming refund of service tax paid on specified services used for authorised operations in SEZ under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed into service for finding out whether a unit in SEZ qualifies for exemption or not. Following the said principle, the Tribunal in the case of DLF Assets Pvt. Ltd. Vs. Commissioner -2021 (45) GSTL 176 (Tri.) affirmed the view that it is not necessary to examine whether the conditions set out in the notification issued under section 93 of the Finance Act was satisfied or not for grant of any exemption from service tax. 16. Subsequently, the Tribunal in SRF Ltd., Vs. Commr. of Cus. C. Ex. & S.T., LTU New Delhi -2022 (64) GSTL 489 (Tri. Del.) dealt with the issue of entitlement of refund of service tax where some of the services were directly provided to and paid for by the SEZ unit while certain other services were provided to the head office which was registered as an Input Service Distributor (ISD) and on examining the various provisions of the SEZ Act, observed that there is duplication as the Act itself provides for exemption of central excise duty, customs duty and the service tax, however there are exemption notifications issued under the respective laws subject to certain conditions. It is relevant to take note of some of the paras of the said decision:- "37. Thus, Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the other laws. --- ----- ----- ------ 47. In one case, the claim for refund was alleged to have been filed beyond one year from the date of the invoice and it was not filed in the same quarter as required under the exemption notification. So far as the requirement of filing in the quarter under the exemption notification is concerned, this condition is irrelevant as the exemption notification itself is not necessary and the service tax is exempted by Section 26 of the SEZ Act itself. As far as the period of one year for filing refund of service tax is concerned, learned Counsel submits that although the invoice is dated 21.08.2014, it had paid the service tax only on 26.10.2015 before which it could not have claimed refund. The claim was made in January, 2016. We, therefore, find that there was no delay in filing the refund claim." 17. Similarly, in Commissioner of Central Excise and Service Tax Vs. M/s Reliance Industries Ltd.,- 2019 (26) GSTL 34 (Tri. Ahmd.) one of the issues related to compliance of Clause (e) of para 3 (III) of the Notification No. 12/2013-ST in respect of the refund of service tax paid on specified services that were common to both SEZ and ISD, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he refund claim under table-II can only be filed when the SEZ Unit receives the ISD Invoices. In the present case there is no dispute that the respondent has filed the refund claim within one year from the date of ISD Invoices. It is clear that without the ISD Invoices, refund cannot be filed. As per the format of Table- II in such case it is impossible to file a refund claim from the date of actual payment of service tax to the service provider therefore, the condition prescribed under clause (e) of Para 3 (III) is applicable only in respect of Table-I of Form A-4. The conditions prescribed under clause (a) to (h) are for the refund filed under Table-I & II therefore, obviously all such conditions shall not be applicable for refund made under Table-I & II both. Some conditions shall apply to Table-I and some shall apply to Table-II. For example, clause (a) shall be applicable only in respect of common service used for SEZ as well as operations in DTA where the refund has to be claimed under Table-II of Form A-4 whereas, this condition is not applicable in a case of input service used exclusively in SEZ and refund claim is made in Table-I of Form A-4. Clause (b) on the other hand i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax is directly made by the SEZ to the service provider when the services are exclusively used in the SEZ unit. Legislators intention is very clear that one year period is applicable only in case of payment directly made by SEZ Unit and not in a case where the Head Office of the SEZ unit is making the payment. ----- ------ ------ ---- 4.11 In the case of expenses of all services received by SEZ Unit can be ascertained only on the basis of input service distribute invoices, on the basis of which the SEZ unit's books of accounts can be maintained properly and correctly therefore, the ISD Invoice is the only document for all the purposes for the SEZ Units. As per the above intention of Rule 19(7), the SEZ Unit is a separate legal entity. The words used in clause (e) of Para (III) of notification that prescribes one year from the date of payment by the SEZ Unit should be construed directly and according to which the one year period for filing refund shall apply only in case where the payment is directly made by SEZ Unit for which Table-II is prescribed for claiming the refund in that condition (e) shall be applied in case of refund made in Table-II of Form A-4 accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laim 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 (II) 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 full effect to and before interpreting a statute, "we must first ask ourselves what is the object sought to be achieved by the provision and construe the statute in accordance with such object". The Court went ahead to hold that in the event of any ambiguity in su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a laid down in an exemption notification are required to be construed strictly, however once it is found that the applicant satisfies the same, the exemption notification should be construed liberally, G. P. Ceramics Pvt. Ltd Vs. Commissioner, Trade Tax, UP 2009 (2) SCC 90, Associated Cement Companies Ltd., Vs. State Bihar 2004 (7) SCC 642, Commissioner of Customs (Preventive), Mumbai Vs. M. Ambalal & Company 2011 (2) SCC 74. 24. It is also relevant to refer the decision of the Apex Court in Suksha International Vs. Union of India 1989 (39) ELT 503, observing that interpretation restricting the scope of beneficial provision should be avoided so that it may not take away with one hand what the policy gives with the other. 25. Also in Formica India Vs. Collector of Central Excise 1995 (77) ELT 511, the Apex Court observed that once a view is taken that a party would have been entitle to the benefit of the notification had they met with the requirements of the concerned rule, the proper course was to permit them to do so rather than denying to them the benefit on the technical grounds that the time when they could have done so had elapsed. 26. In the facts of the present we allow t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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