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TMI Blog2023 (12) TMI 1301X X X X Extracts X X X X X X X X Extracts X X X X ..... ve been considered for computation of the refunds due, as per the order in original detailed in table below:- Refund Claim Order in Original Date Period Amount No Date 30.09.2013 Oct 12 to Dec 12 11208523 65/R/AC/CGST/DI/2018-19 13.08.2018 29.09.2015 Jul 14 to Sept 14 2866101 117/R/AC/CGST/DI/2018-19 17.10.2018 29.09.2015 Oct 14 to Dec 14 3836800 119/R/AC/CGST/DI/2018-19 17.10.2018 30.12.2015 Jan 15 to Mar 15 4064450 120/R/AC/CGST/DI/2018-19 17.10.2018 1.3 These orders were challenged by the appellant before the Commissioner (Appeal), who has vide his orders as detailed in table below disposed of the appeals. Aggrieved by the impugned orders appellants have filed these four appeals as detailed in table below: Appeal No Order in appeal Order in Original No Date No Date ST/70377/2020 NOICUSTM000-APP1395-19- 20 11.02.2020 65/R/AC/CGST/DI/2018-19 13.08.2018 ST/70379/2020 NOICUSTM000-APP1481-19- 20 28.02.2020 117/R/AC/CGST/DI/2018-19 17.10.2018 ST/70381/2020 NOICUSTM000-APP1483-19-20 28.02.2020 119/R/AC/CGST/DI/2018-19 17.10.2018 ST/70378/2020 NOICUSTM000-APP1482-19- 20 28.02.2020 120/R/AC/CGST/DI/2018-19 17. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it of a SEZ should have paid the amount indicated in the invoice, bill or as the case may be, challan, including the service tax payable, to the person liable to pay the said tax or the amount of service tax payable under reverse charge, as the case may be, under the provisions of the said Act. Thus, in terms of the provisions contained under Rule 2(1)(d)(C) of the Service Tax Rules read with Section 26 read and Section 51 of the SEZ Act, and further read with Rule 31 of the SEZ Rules, the refund is allowable to the Appellant irrespective of whether the said service is specifically approved or otherwise. In view of the aforesaid legal provision, it was the submission of the Appellant that since the Appellant was the person liable to deposit service tax in relation to `sponsorship service' received by it, there was no requirement to get the said services approved as the said services have been used in relation to authorized operations of the Appellant, The object behind getting the services approved by the Approval Committee of the SEZ is to secure the fact that the said services should be availed in relation to authorized operations by the SEZ unit. If the said services are not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eply letter dated 11.06.2014 to Show Cause Notice wherein they mentioned that this amount was claimed in excess due to incorrect computation and is a bonafide error on their part. 5.5 I find that the appellant contested forcefully that there was violation of natural justice but nothing was found on record in this regard as the appellant had himself admitted that they were afforded the opportunity of personal hearing by the adjudicating authority on 27.02.2018 which was attended by Sh. Tarique Rehman, Manager(Finance) of the party and Sh. Vishal Kumar, Advocate, on the behalf of the appellant. When they attended PH, they could have submitted their written explanation to the adjudicating authority. In view of the above, the allegation of the appellant does not stand. OIA No NOI-CUSTM-000-APP-1481-19-20 dated 28.02.2020 5.1 I. find that the adjudicating authority denied the refund mainly on the grounds i.e various input services were not approved by the Development Commissioner, SEZ, as per requirement of the Notification and some of the invoices on which credit was taken were addressed to the outside of SEZ premises; even some invoices were missing .On going through the Anne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enance Service 3. Sponsorship Service 4. Membership Fee 5. Manpower Recruitment & Supply Agency Services 6. Telecommunication Service 7. Insurance Auxiliary Service 8. Security Agencies 9. Charted Accountant Service 10. Non-Executive Director Fee 11. Photography Service 12. Works Contract Service 5.1 I. find that the adjudicating authority denied the refund mainly on the grounds i.e various input services were not approved by the Development Commissioner, SEZ, as per requirement of the Notification and some of the invoices on which credit was taken were addressed to the outside of SEZ premises; even some invoices were missing .On going through the Annexure-I enclosed with the SCN, I find that credit as well as refund has been denied mainly on the following reasons for inadmisibility; 1. Some services were not approved in the default list. 2. Some services were used at unregistered premises. 3. Invoice not produced 4. Car maintenance/ Not related to Export ServiceAuthorised operation. 5.2 Taking up the first issue, I observe that the requisite approval for the specified services was to be accorded by the approval Committee, which was o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I observe that the requisite approval for the specified services was to be accorded by the approval Committee, which was one of the essential condition of Notification No 12/2013. If any service was not approved as specific service that same could not be taken for the refund as per said Notification. The conditions provided under the said notification says that: "for the purpose of claiming exemption, the Unit of a SEZ or developer shall obtain a list of services that are liable to service tax as are required for the authorized operations approved by the Approval Committee (hereinafter referred to as the specified services) of the concerned SEZ;" hence credit taken on Services which are not approved by the approval committee is not admissible to the appellant and the refund attributed to the extent of those services is not admissible to the party 5.3 As regards Services used at the unregistered unit outside SEZ,I find that the exemption benefit by way of refund under Notification No.12/2013-ST dated 01.07.2013 is available only to the services received by the units located in SEZ. Hence benefit of the Notification No.12/2013-ST dated 01.07.2013 may not be granted to the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e condition provided in the Notification No 40/2012-ST & 12/2013- ST in terms of which these fund applications have been made. The said condition reads as follows: "(c) for the purpose of claiming exemption, the Unit of a SEZ or developer shall obtain a list of services that are liable to service tax asare required for the authorised operations approved by the Approval Committee (hereinafter referred to as the specified services) of the concerned SEZ;" 3.3 The issue in respect of applicability of the said condition for considering the application of refund made under the said notification is no longer res-integra and has been adjudged in a series of decisions of CESTAT. I reproduce the relevant paragraphs from the recent decision of the Allahabad Bench in the case of EXL Services SEZ BPO Solutions Pvt. Ltd. [2023- TIOL-852-CESTAT-ALL] on the issue: 4.4 Further, we find that the only issue for consideration in the present case is whether the claim for refund made in terms of the notification No 9/2009-ST dated 03.03.2009 can be denied just for the reason that the the taxable services in respect of the which the claim has been made, are not mentioned in the list of specified se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rations in the SEZ, approved from the UAC. 41. It has been pointed out by Learned Counsel for the appellant that the output services rendered by the SEZ unit of the appellant were only for authorized operations. The contention of the Learned Counsel for the appellant, therefore, is that not only does the impugned order not contain any specific finding or quantification, but even otherwise the requirement of grant of approval by the UAC cannot be considered as a mandatory condition to override the exemption that has been granted under Section 26 of the SEZ Act and the SEZ Rules framed thereunder. It is, therefore, the contention that the Commissioner (Appeals) committed an illegality in rejecting the refund applications filed by the appellant. 42. Learned authorised representative has, however, submitted that the appellant is not entitled to the refund. 43. The records indicate that the appellant had during the relevant period only one operating unit in the SEZ. All the input services were, therefore, used by the appellant for the authorized operations, namely, BPO (ITES) as per the specific condition prescribed under the SEZ Act for seeking exemption from service tax and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssionerate [2019-VIL-140-CESTAT-BLR-ST] = 2018- TIOL-1435-CESTAT-BANG, 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 that the said approval was obtained from the competent authority on 25-10-2011 and therefore, after the approval, he has allowed the refund and prior to that he has rejected the same. Further, I find that in view of the settled legal position by various decisions relied upon by the appellant, conditions of approval from UAC is not a mandatory requirement as per SEZ Act vide section 51 of the SEZ Act which has an overriding effect over th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en approved, the benefit of exemption cannot be denied. Section 26 of the SEZ Act, lays down provisions for exemption from duties and taxes. Section 51 of the said Act provides for overriding effect. Therefore the immunity provided from paid service tax cannot be taken away by the procedural prescriptions of Notification No. 9/2009 or 15/2009. These notifications are calibrated to enable recipients of taxable services of SEZ, etc., to get benefit of exemption of the service tax. In any case, since 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." (Emphasis supplied) 48. Thus, the Commissioner (Appeals) was not justified in rejecting the refund claims on this ground." B. In case of SRF Ltd [2022 (64) GSTL 489 (T-Del)] tribunal held as follows: "36. Special Economic Zones created under the SEZ Act are on a different footing because the SEZ Act itself exempts goods and services supplied for authorised operations to developers ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny instrument having effect by virtue of any law other than this Act. 38. Thus, insofar as supplies for authorised operations of SEZ developers and units are concerned, Section 26 of the SEZ Act overrides the charging sections in all the three Acts. 39. The charging sections, having been overridden by the SEZ Act passed by the Parliament, no legal authority to levy and collect central excise duty, customs duty or service tax for goods or services supplied for authorised operations of SEZ developers and units covered by Section 26 remains. Without such a legal authority, no tax or duty can be either levied or collected in view of Article 265 of the Constitution of India. 40. Therefore, there is no need for any exemption notifications under any of these three Acts nor is it necessary to fulfil any conditions of any of the conditions laid down in exemption notifications, if any, issued for the purpose. Thus, the charge of excise duty under Section 3 of the Central Excise Act, the charge of Customs Duty under Section 12 of the Customs Act and the charge of service tax under Sections 66, 66A and 66B of the Finance Act, 1994 will not apply to goods and services supplied to de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any duty of customs, under the Customs Act, 1962 or the Custom Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or service provided in, a Special Economic Zone or a Unit, to carry on the authorised operations by the Developer or entrepreneur; (b) exemption from any duty of customs, under the Customs Act, 1962 or the Customs Tariff Act, 1975 or any other law for the time being in force, on goods exported from, or services provided, from a Special Economic Zone or from a Unit, to any place outside India; (c) exemption from any duty of excise, under the Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or any other law for the time being in force, on goods brought from Domestic Tariff Area to a Special Economic Zone or Unit, to carry on the authorised operations by the Developer or entrepreneur; (d) drawback or such other benefits as may be admissible from time to time on goods brought or services provided from the Domestic Tariff Area into a Special Economic Zone or Unit or services provided in a Special Economic Zone or Unit by the service providers located outside India to carry on the authorised operations by the Develo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed in the following decisions: * Tega Industries Ltd. {2022 (67) GSTL 81 (T-Ahmd)] * Intas Pharmaceuticals Ltd. [2022 (64) GSTL 216 (TAhmd)] * Divi's Laboratories Ltd. [2021 (54) GSTL 400 (T-Hyd)] * Herman Connected Services Corporation India Pvt Ltd. [2021 (49) GSTL 11 (T-Bang)] * SE Forge Ltd. [2019 (365) ELT 560 (T-Chennai)] * Reliance Ports and Terminals Ltd. [2015 (40) STR 200 (TAhmd)] 3.5 On the ground for rejection that certain invoices were addressed to some other premises of the Appellant which are outside the SEZ. I do not find any merits in the said ground. If it can be shown that the services covered by the said invoices were received and consumed by the appellant unit located in SEZ, then the CENVAT Credit/ Refund could not have been denied. In my view it is the place of receipt and consumption of service which shall determine the admissibility of CENVAT Credit/ Refund. If the appellant is able to establish that the services were received by them in their unit located in SEZ, CENVAT Credit/ Refund as per these notifications shall be admissible to him. In case of SRF Ltd. [2022 (64) GSTL 489 (T-Del)] Delhi Bench has observed as follows: "46. Refund ..... X X X X Extracts X X X X X X X X Extracts X X X X
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