TMI Blog2023 (12) TMI 1301X X X X Extracts X X X X X X X X Extracts X X X X ..... ention in the list of specified services approved by the SEZ authority cannot be upheld. On the ground for rejection that certain invoices were addressed to some other premises of the Appellant which are outside the SEZ. There are no 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. There are no merits in the impugned orders denying the CENVAT Credit/ Refund claims filed by the party in terms of the Notification No 40/2012-ST and 12/2013-ST on the grounds stated therein. However for determination of the refund claims in light of the above observations matter is to be reconsidered by the original authority. Appeals are allowed and the matter remanded to the original authority for reconsideration of the refund claims. - HON BLE MR. SANJIV SRIVASTAVA, MEMBER (TECHNICAL) Shri Vishal Kumar, Advocate for the Appellant Shri Manish Raj, Authorised Representative for the Respondent SANJIV SRIVASTAVA: Appellant is an STPI as well as SEZ unit registered with STPI SEZ Noida. They are having centralized service tax registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted, service wise, as below; 1) SPONSORSHIP SERVICE:- An amount of Rs. 24,720/- was paid by the Appellant on the 'sponsorship service' under RCM and the same has been availed by them in relation to the authorized operations. Since the liability of payment of service tax on 'sponsorship service' is under reverse charge, the refund would be allowable irrespective of whether the same is an approved service or otherwise. The Sec. 26 of the SEZ Act, 2005 (SEZ Act'), provides for special fiscal provisions with respect to units in special economic zones. In terms of the said Section 26(e) of the SEZ Act read with Rule 31 of the SEZ Rules, 2006, every Developer and the entrepreneur shall be entitled to exemption from payment of service tax under Chapter V of the Finance Act, 1994 on taxable services provided to a Developer or unit to carry on the authorized operations in a Special Economic Zone. Section 51 of the SEZ Act further provides that the provisions of SEZ 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 22 any law other than this Act. Serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... them which was an approved service as per the default list of approved services dated 29.08.20 12 and the same appears under serial no. 1 of the approved list of services. I have gone through the default list of Service in terms of Notification No. 40/2012 dated 20.06.2012 effective from 01.07.2012 for use by the units in SEZs located at Noida, Greater Noida and Khurja (Annexure-I) circulated/issued vide letter 10/20/2011-SEZ/6572 dated 29.08.2012 and find that Courier service finds mention at Sl. No. 1 of approved list of services. Hence, credit of Rs. 29726/- taken on Courier Service is allowable to the appellant 5.3 As regards advertising services, landscaping services and gym services amounting to Rs. 8990/- it was submitted that they had availed these services in relation to authorized operations. Regarding the 'landscaping services' they took plea that the Appellant had submitted proposal for approved list of services (after from the default list) and the same was accepted vide Minutes of Meeting of the Development Commissioner dated 11.01.2012. In such scenario, the 'landscaping services' had been availed in relation to the authorized operations of the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as are required for the authorised 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 party. In case of Invoice not produced before the adjudicating authority is not admissible to the appellant in the absence of the Original Invoice, hence credit on the same is not admissible to them. OIA No NOI-CUSTM-000-APP-1483-19-20 dated 28.02.2020 5. I have carefully gone through the above mentioned impugned order and contents of appeal, oral as well written submission of the party along with relevant Act/Rule. In this case, it isobserved that Input Service Tax Credit has been denied by the Adjudicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13-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 party. 5.4 In case of Invoice not produced before the adjudicating authority pertaining to the Works Contract Service involving an amount of Service Tax Rs. 486/-is not admissible to the appellant in the absence of the Invoice. Further, maintenance and repair service does not find place in the Default List of Services approved by approval committee held on 26.09.2013 in terms of Notification No. 12/2013-ST dated 01.07.2013, hence credit on the same is also not admissible to them 6. I n the light of above findings and discussions the impugned order is upheld and the appeal is rejected. OIA No NOI-CUSTM-000-APP-1482-19-20 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 Annexure-I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e common issue is involved in all the four appeals they have been taken up for consideration together. 2.1 I have heard Shri Vishal Kumar, Advocate for the Appellant and Shri Manish Raj Authorized Representative for the revenue, 2.2 Arguing for the appellant learned advocate submits: Refund of service tax paid is legally admissible to the appellant since majority of services are approved by the Development Commissioner. The requirement of getting the services approved from Development Commissioner/ Unit Approval Committee is merely procedural in nature in light of the overriding effect of Section 51 of the SEZ Act, 2005, hence refund cannot be denied for procedural infractions, if any. Service tax on Sponsorship Service and Management or Business consultant service (director s remuneration) has been availed in relation to authorized operations and service tax has been paid under reverse charge, hence, refund on same be allowed. Refund in respect of service tax paid in relation to invoices inadvertently raised to unit of appellant outside SEZ cannot be denied, more so, when the services have been availed by the appellant in relation to authorized operations. 2.3 Learned authorized r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he condition specified in proviso (a) to the notification only provides a manner for verification that the services in respect of which the refund claim has been made were received by the SEZ developer or the SEZ Unit. There can be many other ways by which the said claim with regards to the receipt of these services by the SEZ unit can be verified. Till the time the factum of receipt of these services by the SEZ unit is not disputed the denial of refund of service tax paid on any service received by such unit would be contrary to the provisions of Article 265 of the Constitution. In the present case revenue has not disputed the receipt of these services by the SEZ Unit, hence denial of the refund claim in respect of these three services for the reason that they did not find mention in the list of specified services approved by the SEZ authority cannot be upheld. 4.5 We also find that the issue involved in the present appeal is no longer res-integra. Similar view has been expressed by the tribunal in following cases A. In case of Metlife Global Operations Support Center (P) Ltd. [2021 (46) GSTL 418 (T-Del)] = 2021-TIOL-10- CESTAT-DEL following has been held: 40. This issue relates t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t 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 will have overriding effect over the provisions of any other law. Therefore, keeping in view, the intention of the Government in enacting the SEZ Act and giving special fiscal concessions to SEZs, I am of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice tax paid on Renting of Immovable Property Service. The original authority has rejected the refund on the ground that on the date of filing of the refund claim, the said services, viz; Renting of Immovable Property Services were not approved by the Development Commissioner, as required under Notification No. 9/2009 as amended. As per the notification, exemption is allowed in relation to authorised operations in SEZ, provided the developer or units of SEZ shall get the list of services which are required in relation to the authorised operations approved from the Approval Committee. The appellant although requested for approval of 106 services initially, the Assistant Commissioner had approved only 37 services which was only default list or rather a general list applicable to all SEZ. It is seen that Development Commissioner has approved the list including Renting of Immovable Property Services vide letter dated 15-9-2009. It is not disputed that Renting of Immovable Property Service was availed by the appellant for the disputed period. The invoices shows the payment of service tax on such services. The Approval Committee has approved such services vide their letter dated 15-9-200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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; xx xx xx (e) exemption from service tax under Chapter-V of the Finance Act, 1994 on taxable services provided to a Developer or Unit to carry on the authorised operations in a Special Economic Zone; 37. Thus, Section 26(1) of the SEZ Act is inconsistent with the three charging sections viz., Section 3 of the Central Excise Act, 1944, Section 12 of the Customs Act, 1962 and Sections 66, 66A and 66B of Chapter V of the Finance Act, 1994. In addition to the general principle of a specific law (pertaining to SEZ) prevailing over the general law (levying customs, central excise or service tax) and the later enactment (such SEZ Act, 2005) prevailing over the earlier enactments (Central Excise Act, 1944, Customs Act, 1962 and Finance Act, 1994), in the SEZ Act, the Parliament has explicitly resolved this inconsistency between the laws. Section 51 of the SEZ Act states that the provisions of SEZ Act override any other provisions of other laws. It reads as follows : 51.(1) The provisions of this A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which tax liability of Rs. 1,73,70,528 should have been discharged and, in accordance with Notification No. 17/2011-S.T., dated 1st March 2011, should have been backed by Form A-1 which, upon scrutiny, was found to have been verified only on 14th June 2011. It is further alleged that the appellant herein, for the period from 1st July 2012 to 31st March 2013 had availed of exemption against form A-I which, having been dated only on 29th August 2012, precluded the privilege between 1st July 2012 and 28th August 2012 during which taxable service valued at Rs. 12,92,07,189 was rendered without discharging liability of Rs. 1,59,70,009. In sum, the recovery of Rs. 11,59,10,135 was ordered on account of breach of condition in the respective notifications embodying the procedure by which the appellant could have availed exemption from service tax on supply of services to units in Special Economic Zones (SEZ). .... 6. The issue to be decided on this appeal is plain and simple enough: whether the notifications relied upon by the adjudicating authority can invalidate exemption accorded under : ' 26. (1) Subject to the provisions of sub-section (2), every Developer and the entrepreneur sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y other law for the time being in force or in any instrument having effect by virtue of any law other than this Act.' of Special Economic Zones Act, 2005 that no other law can prevail over it. 7. It is on record that the required documentation was not available for the entire period of the dispute but, at the same time, it cannot be denied that at some point, the eligibility did exist. The procedural infirmities, for a shorter or longer time, does not in any way supplant the exemption accorded to the impugned supply of services. Furthermore, the findings of the adjudicating authority do not arrive at a conclusion that, but for the said procedural infirmities, the eligibility of the appellant to render such services without payment of tax was in question. In the light of decision cited supra, the overriding nature of the exemption afforded by Section 26 of Special Economic Zones Act, 2005 and the breach of conditions being procedural, we have no hesitation in setting aside the demand pertaining to the rendering of services to M/s. Credit Suisse Service (India) Pvt. Ltd. 3.4 I view of the above I do not find any merits in the impugned orders to the extent it seeks to deny CENVAT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he same is satisfactory. 13. If the service recipient is a SEZ unit, they should pay Service Tax to the service provider and claim the refund of the amount. In the case in hand, the fact that the appellant is SEZ unit is not disputed and the receipt of the services is also not disputed as also the payment of Service Tax to the service provider. In the absence of any adverse findings on these issues, I find that the appellant herein is eligible for claiming refund of the Service Tax paid by the service provider which is in consonance with the law. 3.7 Thus I do not find merits in the impugned orders denying the CENVAT Credit/ Refund claims filed by the party in terms of the Notification No 40/2012-ST and 12/2013-ST on the grounds stated therein. However for determination of the refund claims in light of the above observations matter is to be reconsidered by the original authority. 4.1 Appeals are allowed and the matter remanded to the original authority for reconsideration of the refund claims in the light of the observations made in this order. 4.2 As the issue is in respect of the refund claims filed in the year 2013 2015, Original Authority is directed to finalize the refund clai ..... X X X X Extracts X X X X X X X X Extracts X X X X
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