TaxTMI 
TaxTMI 
2023 (3) TMI 1122
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....t was rejected by the Commissioner (Appeals) vide order dated 16.09.2020. Hence the appellant has filed the present appeal before this Tribunal. 3. Briefly stated, the appellant is engaged in the manufacture and export of pharmaceutical products at their unit in SEZ, Pithampur, having Letter of Approval (LA) for undertaking authorised operations within SEZ at Pithampur. The head office of the appellant is in Mumbai which has been registered as Input Service Distributor (ISD). Under Notification No. 12/2013-ST dated 01.07.2013, the appellant filed two applications in Form A-4 claiming refund of service tax paid on input services received in SEZ unit, i.e. i) on 10.10.2017 for a sum of Rs 17,61,17,668/ for the period January 2017 to March 2017 and ii) on 28.03.2018 for a sum of Rs 95,02,081/ for the period April 2017 to June 2017. 4. The adjudicating authority vide order dated 12.03.2019 sanctioned the refund of Rs. 12,39,33,099/- for the period January 2017 to March 2017 and rejected the remaining claim of Rs. 5,21,62,728/- being time barred. Similarly, for the period April 2017 to June 2017 the adjudicating authority sanctioned the refund of 44,64,081/- towa....
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....he event of any delay, whether the same could be condoned. Referring to the decisions in J.J. Meridian Industries Ltd. Vs. CCE - 2015 (325) ELT 417 (SC), and Commissioner of C. Ex. Trichy Vs. Rukmani Pakkwell Traders -2004 (165) ELT 481 (SC), he relied on the general principles of interpretation of the exemption notification, to say that it has to be construed strictly and also pleaded the doctrine of approbation and reprobation. On the issue of delay, he submitted that it is a matter of discretion and the Tribunal should not interfere unless the order is arbitrary, capricious or unjust and relied on Sonali Steels & Alloys (P) Ltd., Vs. Union of India -2000 (123) ELT 493 (Mad.), Goyal Traders Vs. Commr. of C. Ex., & Cus. Ahmedabad -2001 (136) ELT 1401 (Tri. Mumbai) and Bombay Pharma Products Vs. Collector of Customs, Bombay - 1988 (34) ELT 691 (Tri.). In the written submissions filed by the revenue, it is submitted that the impugned notification having been declared as non-existent in the case of GMR (supra) and in SRF (supra), the present appeal needs to be dismissed. 8. Before examining the case on merits, we need to peruse the observations made by the Tribunal while remanding....
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.... said notification lists out certain conditions subject to which refund of service tax would be available." Thus, what falls from above is that the appellant referred to the applicability of limitation only to a case where payment was required to be made by the SEZ unit to the service provider but where payment was made by the ISD to the service provider, the time limit of one year would not apply. The adjudicating authority fell in error in arriving at the conclusion that under Para 3(III)(e) of the Notification the relevant date should be the actual payment by the ISD to the service provider and neither the date of invoice of ISD nor the date of payment by the SEZ unit to its Head office, i.e. ISD can be taken note of. Therefore, the adjudicating authority proceeded to justify its earlier order by quoting the paras from there and concluded: "14.6. In view of the above reproduced paras of the two original adjudication orders, I find it pertinent to mention that the date of actual payment of service tax by the ISD to the service providers was and is available on record. Therefore, in accordance with Para 3(III)(e) of Notification No. 12/2013-ST dated 01.07.2013 time lim....
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.... as on the condonation of delay by the impugned order. Hence the appellant has challenged the said order in the present appeal before this Tribunal. 12. We are conscious of the scope of the remand order and the order passed in the present case on 19.12.2019, however keeping in view the law as enunciated by the various decisions of the High Court and the Tribunal, we find that the issue is no longer res-integra and the present controversy stands settled. 13. Before referring to the case laws we would like to refer to the relevant provisions of the Notification under consideration:- "3. This exemption shall be given effect to in the following manner: (I) The SEZ Unit or the Developer shall get an approval by the Approval Committee of the list of the services as are required for the authorised operations (referred to as the 'specified services' elsewhere in the notification) on which the SEZ Unit or Developer wish to claim exemption from service tax. (II) The ab-initio exemption on the specified services received by the SEZ Unit or the Developer and used exclusively for the authorised operation shall be allowed subject to the following procedure and co....
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.... paid on (i) the specified services on which ab-initio exemption is admissible but not claimed, and (ii) the amount distributed to it in terms of clause (a). (c) the SEZ Unit or Developer who is registered as an assessee under the Central Excise Act, 1944 (1 of 1944) or the rules made thereunder, or the said Act or the rules made thereunder, shall file the claim for refund to the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, the as the case may be, in Form A-4; (d) the amount indicated in the invoice, bill or, as the case may be, challan, on the basis of which this refund is being claimed, including the service tax payable thereon shall have been paid to the person liable to pay the service tax thereon, or as the case may be, the amount of service tax payable under reverse charge shall have been paid under the provisions of the said Act; (e) the claim for refund shall be filed within one year from the end of the month in which actual payment of service tax was made by such Developer or SEZ Unit to the registered service provider or such extended period as the Assistant Commissioner of Central Excise or t....
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....y any duty or tax on the units in SEZ. The intention of the Legislature in granting exemption from levy of duties and taxes was to ensure that the SEZ units function burden free. The whole object is to boost the SEZ units. 15. The High Court of Andhra Pradesh in GMR Aerospace Engineering Limited Vs. Union of India- 2019 (31) GSTL 596 (A.P.) after analysing the provisions of the SEZ Act, 2005 and the provisions of the Finance Act, 1994 concluded that the notification issued under section 93 of the Finance Act, 1994 cannot be pressed into service for finding out whether a unit in SEZ qualifies for exemption or not. Following the said principle, the Tribunal in the case of DLF Assets Pvt. Ltd. Vs. Commissioner -2021 (45) GSTL 176 (Tri.) affirmed the view that it is not necessary to examine whether the conditions set out in the notification issued under section 93 of the Finance Act was satisfied or not for grant of any exemption from service tax. 16. Subsequently, the Tribunal in SRF Ltd., Vs. Commr. of Cus. C. Ex. & S.T., LTU New Delhi -2022 (64) GSTL 489 (Tri. Del.) dealt with the issue of entitlement of refund of service tax where some of the services were directly provided t....
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....r the purpose. Thus, the charge of excise duty under Section 3 of the Central Excise Act, the charge of Customs Duty under Section 12 of the Customs Act and the charge of service tax under Sections 66, 66A and 66B of the Finance Act, 1994 will not apply to goods and services supplied to developers and units for authorized operations in the SEZ areas by virtue of the overriding provisions of the SEZ Act. Any exemption notifications and conditions therein are therefore, redundant because, the Parliament itself has, through Section 51 of the SEZ Act, overridden the charge in the other laws. --- ----- ----- ------ 47. In one case, the claim for refund was alleged to have been filed beyond one year from the date of the invoice and it was not filed in the same quarter as required under the exemption notification. So far as the requirement of filing in the quarter under the exemption notification is concerned, this condition is irrelevant as the exemption notification itself is not necessary and the service tax is exempted by Section 26 of the SEZ Act itself. As far as the period of one year for filing refund of service tax is concerned, learned Counsel submits that alth....
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....xtend the said time limit is vested with the Assistant Commissioner/Deputy Commissioner of Central Excise. Firstly, as we observed above, the Deputy Commissioner has rightly extended the time limit on the cogent reason. Secondly the condition (e) of Para 3 (III) of Notification is applicable only in respect of the refund claimed under Table-I of Form A-4. From the Table-II, coloumn 9, 10 & 11 it clearly provides that only amount distributed to the SEZ Unit/Developer needs to be claimed as refund and detail of documents such as ISD Number and date has to be mentioned. As per the said format, the refund claim under table-II can only be filed when the SEZ Unit receives the ISD Invoices. In the present case there is no dispute that the respondent has filed the refund claim within one year from the date of ISD Invoices. It is clear that without the ISD Invoices, refund cannot be filed. As per the format of Table- II in such case it is impossible to file a refund claim from the date of actual payment of service tax to the service provider therefore, the condition prescribed under clause (e) of Para 3 (III) is applicable only in respect of Table-I of Form A-4. The conditions prescribed un....
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....directly made by the SEZ to the service provider. However, in case all the services which are attributed to the SEZ Unit as well as DTA Unit of the respondent company the payment was made by the Head Office of the respondent SEZ Unit and the credit related to service attributed to the SEZ unit was distributed through ISD Invoice to the respondent's SEZ Unit. In this case payment was not made by the respondent's SEZ Unit therefore, the condition of clause (e) of Para (III) of the notification shall not apply for the reason that the said clause is applicable only in a case where the payment of service tax is directly made by the SEZ to the service provider when the services are exclusively used in the SEZ unit. Legislators intention is very clear that one year period is applicable only in case of payment directly made by SEZ Unit and not in a case where the Head Office of the SEZ unit is making the payment. ----- ------ ------ ---- 4.11 In the case of expenses of all services received by SEZ Unit can be ascertained only on the basis of input service distribute invoices, on the basis of which the SEZ unit's books of accounts can be maintained properly and....
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....m A4 can be preferred by the SEZ unit only after the ISD in the DTA distributes the tax pertaining to invoices under which services common to the SEZ and the DTA units have been received. 21. From the aforesaid, it is evident that the appellant fulfilled the criterias of eligibility to claim refund of the service tax paid on input services in terms of the Notification No 12/2013-ST. Infact it is not the case of the revenue that the appellant is not eligible to make such claims. Their only objection is to the claim being filed beyond the period of one year as per the notification. We are of the considered opinion that once the appellant is found to be eligible to claim the refund, the substantive conditions are complied with and the condition of time limit for making the claim under the notification being only a procedural requirement, needs to be construed liberally. Considering the beneficial object of establishing the SEZ tax free, without any burden of duties, the procedural lapse, if any, cannot be the basis to deny the refund to the appellant. The exemption is intended to be absolute is further evident from para 3 (II) of the Notification which provides for ab-initio exempt....