Facts:
The appellant, a developer of SEZ Special Economic (SEZ) Zone having operations from units in SEZ filed refund claims towards the service tax paid on services consumed within the SEZ and services used for the authorised operations of the SEZ units. The refund claims were considered and partly sanctioned. The appellant appealed against the order and again the refund was partly allowed. Appellant filed an appeal before Tribunal for balance of Rs.19,80,569/-. It involved two components, viz. Rs.6,66,794/-, rejected on the ground that various services did not bear a direct nexus with the authorised operations undertaken by the appellant and Rs.13,13,775/- related to services wholly consumed within the SEZ during July to September, 2009.
Held:
As regards the claim rejected on the ground that the services did not have direct nexus with the authorised operations, the Tribunal held that the Approval Committee issued a specific certificate indicating various services received by the appellant and justification for use of such services in relation to the authorised operations. The jurisdictional Commissioner of Central Excise was also a member of such Approval Committee. In view thereof, it was unwarranted for the adjudicating and appellate authority to go into the question and come to their own findings in the matter. Thus, this rejection was set aside.
As regards the latter claim, the question was whether the appellants could be granted refund under Notification No. 09/2009-ST as amended by Notification No.15/2009-ST dated 20-05-2009 through which one condition was inserted stating that the refund procedure prescribed under the said Notification shall apply only in the case of services used in relation to the authorised operations in the SEZ; except for services consumed wholly within the SEZ.
Tribunal held that Notification No. 09/2009-ST exempted the taxable services specified in Clause (105) of section 65 of the Finance Act, 1994 which were provided in relation to the authorised operations in a SEZ and received by a developer or units of a SEZ, whether or not the said taxable services are provided inside the SEZ, from the whole of the service tax leviable thereon u/s. 66 of the Finance Act, 1994.
In the case of services which were wholly consumed within the SEZ, there was no necessity to discharge the service tax liability ab initio. That did not mean that where service tax liability had been discharged, the appellant was not entitled for refund. If the appellant was eligible otherwise for refund u/s. 11B, then it cannot be denied because the claim was made under Notification No.09/2009- ST and there was no dispute about the services being in relation to authorised operations of the appellant within the SEZ. The records showed that the refund claim was lodged within the time prescribed u/s. 11B and the appellant had borne the incidence of taxation.
Services provided to a SEZ or unit in the SEZ were deemed as export in terms of the SEZ Act, 2005 and entitled for exemption from payment of service tax on the services used or provided to a unit in the SEZ. Further, vide section 51 of the said Act, SEZ provisions prevail over the provisions of any other law. Accordingly, a broader view of the provisions relating to refund had to be taken.
Accordingly, the orders were set aside with consequential relief.
