Appellant entitled to Service Tax refund within SEZ unit under Central Excise Act

The Tribunal allowed the appeals by remanding them for a fresh order on the refund claim. It concluded that the appellant is entitled to a refund of Service Tax paid on services consumed within the SEZ unit, to be processed under Section 11B of the Central Excise Act, 1944, based on the interpretation of relevant notifications and legal provisions.

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Issues involved:
Refundability of Service Tax paid on services consumed within SEZ unit before the amendment of notification 09/2009-ST by amendment notification no. 15/2009-ST.

Analysis:

Issue 1: Refundability of Service Tax within SEZ unit
The appellant argued that even if the refund is not covered under Notification 15/09-ST, the tribunal has held that since the Service Tax was not payable and was paid, it is refundable under section 11B of the Central Excise Act, 1944. The tribunal referenced various judgments to support this argument. The Revenue reiterated the findings of the impugned order.

Analysis: The Tribunal examined the issue in detail and referred to a similar case before the Mumbai Tribunal. It highlighted that while the exemption by way of refund is not available for services consumed wholly within the SEZ, services received by the appellant, even if consumed within the SEZ, are exempted. The Tribunal clarified that the refund for Service Tax paid on such services is not governed by Notification No. 09/2009-ST but under Section 11B of the Central Excise Act, 1944. The Tribunal directed the adjudicating authority to process the refund claim under Section 11B. The Tribunal allowed the appeals by remanding them for a fresh order on the refund claim.

Issue 2: Interpretation of Notifications 9/2009 and 15/2009
The Tribunal examined the notifications issued under Section 93(1) of the Act in light of the provisions of the Special Economic Zones Act, 2005. It emphasized that the immunity to Service Tax in relation to taxable services provided within SEZ is legislatively enjoined. The Tribunal concluded that the notifications merely outline the process for operationalizing the benefit of exemption/immunity to tax. It clarified that the notifications enable recipients of taxable services to claim a refund of Service Tax remitted by taxable service providers. The Tribunal held that the rejection of the appellant's claim by the adjudicating authority was unsustainable and allowed the appeal for refund.

Conclusion:
The Tribunal, relying on previous judgments and detailed analysis, concluded that the appellant is entitled to a refund of Service Tax paid on services consumed within the SEZ unit. It directed the refund claim to be processed under Section 11B of the Central Excise Act, 1944. The appeals were allowed based on the interpretation of relevant notifications and legal provisions.

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