2015 (2) TMI 474 - AT - Service Tax

SEZ unit wins service tax refund appeal for input services within SEZ, except for missing invoices.

The Tribunal allowed the appeal by the SEZ unit, granting a refund of service tax paid on input services within the SEZ, except for an amount of ... Refund of service tax paid on input services to SEZ units - Exemption for services wholly consumed within SEZ - Refund eligibility under Notification No. 9/2009 read with Notification No. 15/2009 - Eligibility for refund where tax has already been paid by the service provider - Approval of input services by Development Commissioner of the SEZRefund of service tax paid on input services to SEZ units - Exemption for services wholly consumed within SEZ - Eligibility for refund where tax has already been paid by the service provider - Whether the appellant SEZ unit is entitled to refund of service tax paid on input services for the period June 2009 to September 2009 - HELD THAT: - The Tribunal noted that the statutory scheme provides two distinct treatments: where services provided to SEZ units are wholly consumed within the SEZ they are exempt from service tax; where they are not wholly consumed Notification No. 9/2009 read with Notification No. 15/2009 contemplates refund to the SEZ recipient. The Tribunal applied established precedents holding that even when services are wholly consumed within the SEZ a unit remains entitled to refund if tax has already been paid by the service provider. The appellant's input services were approved by the Development Commissioner of the SEZ and the Tribunal relied on its earlier order in the appellant's own case (Order No. A/889-893/13/CSTB/C-I dated 28.3.2013) which supported grant of refund. The only amount not pressed by the appellant related to invoices not submitted (Rs. 3,431), and that small claim was excluded from relief. On that basis the Tribunal allowed the appeal and directed consequential relief except for the amount not pressed.Appeal allowed; refund granted for the period June 2009 to September 2009 with consequential relief, except for the claimed amount of Rs. 3,431 which is not pressed.Final Conclusion: The Tribunal allowed the appeal and directed refund of service tax paid on input services for the period June 2009 to September 2009 (subject to exclusion of the unpressed amount of Rs. 3,431), holding that an SEZ unit is entitled to refund where tax has already been paid by the service provider despite services being wholly consumed within the SEZ. Issues:Refund claim rejection for service tax paid on input services within SEZ.Detailed Analysis:The appellant, an SEZ unit providing export IT services and business support services, filed a refund claim of &8377; 9,72,169/- for the period June 2009 to September 2009. The claim was rejected by the Commissioner (Appeals) and the Asst. Commissioner, citing that the services were wholly consumed within the SEZ, making them ineligible for a refund under Notification No. 9/2009 as amended by Notification 15/2009. The appellant utilized various input services approved by the Development Commissioner of the SEZ, including Management Consultancy services, Chartered Accountancy Service, and IT software services.The Tribunal noted that there are two schemes for exemption of services provided to SEZ Units: one where services are wholly consumed within the SEZ and are exempt from service tax, and the other where services are not wholly consumed within the SEZ, allowing for a refund of tax paid on input services. Previous Tribunal decisions established that even if services are wholly consumed within the SEZ, the unit is eligible for a refund if the tax has been paid by the service provider. The Tribunal referred to its own order in the appellant's case (Order No. A/889-893/13/CSTB/C-I dated 28.3.2013) which supported the appellant's position.The appellant agreed to forego the claim for an amount of &8377; 3,431/-, which was rejected due to missing invoices submitted with the refund claim. After considering the arguments, the Tribunal allowed the appeal, granting consequential relief to the appellant, except for the amount of &8377; 3,431/-, which was not pressed upon during the proceedings. The judgment was dictated in court, finalizing the decision in favor of the appellant.