Tribunal grants appeal, overturns refund rejection for SEZ units under SEZ Act 2005.

The Tribunal allowed the appeal, setting aside the rejection of the refund claim by the Deputy Commissioner. It held that SEZ units are exempt from duties and taxes under the SEZ Act 2005, making the rejection unsustainable. The Tribunal also ruled in favor of the appellant regarding the applicability of Notification No. 40/2012-Service Tax to SEZ units, denial of refund for Business Exhibition Service, and denial of Cenvat credit for Input Services distributed by the Head Office, deeming the impugned orders unsustainable and allowing the appeal with consequential benefits.

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Issues:
1. Rejection of refund claim by Deputy Commissioner.
2. Applicability of Notification No. 40/2012-Service Tax to SEZ units.
3. Denial of refund for Business Exhibition Service.
4. Denial of Cenvat credit for Input Services distributed by Head Office.

Analysis:

Issue 1: Rejection of refund claim by Deputy Commissioner
The appellant filed a refund claim for service tax paid on various services under Notification No. 40/2012-Service Tax. The Assistant Commissioner partially sanctioned the refund, rejecting a portion of it. The appellant appealed to the Commissioner (Appeals), who upheld the rejection. The appellant argued that the rejection was unsustainable as the SEZ units are exempt from duties and taxes under the SEZ Act 2005. The Tribunal held that the non-approval of the list of services by the Development Commissioner was not fatal to the refund claim, citing precedents. The impugned order was set aside, and the appeal was allowed.

Issue 2: Applicability of Notification No. 40/2012-Service Tax to SEZ units
The appellant contended that services used within the SEZ were eligible for a total refund of service tax paid. The Tribunal referred to previous decisions and held that the SEZ Act 2005 granting exemption from duties and taxes had overriding effect. The impugned order's rejection of the refund claim based on non-approval of the service list was deemed unsustainable.

Issue 3: Denial of refund for Business Exhibition Service
The denial of refund for Business Exhibition Service used for promoting the appellant's products was challenged. The Tribunal cited a Chandigarh Bench decision and held that such services had a nexus with the manufacturing business, making them eligible for refund. The appellant's availing of Cenvat Credit on Business Exhibition Service was upheld, and the impugned order was deemed unsustainable.

Issue 4: Denial of Cenvat credit for Input Services distributed by Head Office
The denial of Cenvat credit for Input Services distributed by the appellant's Head Office was contested. The Tribunal ruled that the distribution of credit was permissible under Cenvat Credit Rules, and the denial based on lack of approval by the Approval Committee was unsustainable. The impugned order was set aside, and the appeal was allowed with consequential benefits as per law.

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