TaxTMI 
TaxTMI 
2023 (9) TMI 196
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.... services under the category of Business Auxiliary Service from both locations. 2.2 For providing these services to the clients of its parent companies located in the USA, appellant receives various input services. 2.3 Appellant filed an application on 23.03.2011 for refund of service tax of Rs 21,35,146/- under Notification No 9/2009-ST dated 03.03.2009, in respect of the service tax paid on services used in authorized operations in SEZ during the period October 2010 to December 2010. After scrutiny of the refund claim it was observed that the refund claim is not admissible to the appellant on following grounds: I. The default list of services for the SEZ unit located at NOIDA for authorized operation is approved by the office of the Development Commissioner, NSEZ Noida on 25.02.2011 i.e. after the claim period. Moreover, Para II of the said letter clearly states that "no exemption/ concession can be availed of prior to date of acceptance of Bond cum LUT (Form H) II. As per condition no (f) of Notification No 9/2009-ST dated 03.03.2009 the refund claim should be filed within six months from the date of actual payment of service tax to the service providers.....
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.... input services were issued and input service was approved. The insurance service was an approved service therefore the same was eligible for refund. 3.3 Arguing for the revenue learned authorized representative reiterated the findings recorded in the impugned order. 4.1 We have considered the impugned order along with the submissions made in appeal and during the course of the arguments. 4.2 For dismissing the appeal of the appellant impugned order observes as follows: "4.1 I have gone through the impugned order, the appeal & its enclosures ........... I am of the opinion that the appellant's appeal is based on following four issues: i) Whether the impugned order has traveled beyond the show cause notice dated 27/07/2011 (hereinafter referred as the SCN) issued to the appellant. ii) Whether the refund claim under the notf no 9/2009 in respect of input service wholly consumed within the SEZ is admissible. iii) Whether the refund claim in respect of services of Scientific & technical Consultancy and Custom House Agent, which were not mentioned in the application of the Appellant to SEZ Authority, though the said services were....
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.... the Central Excise Act, 19444 made applicable to service tax vide section 83 of the Finance Act, 1994. I agree with the adjudicating authority. Initially notification no 9/2009-ST provided the exemption for wholly consumed services within SEZ and outside SEZ by way of refund - which required that the service provider should first pay service tax and then SEZ unit seek refund thereof, and then the said notification was amended by Notification No 15/2009-ST to provide additional relief to the SEZ units with respect to the services wholly consumed within SEZ so that the requirement of first paying service tax and then seeking refund thereof may be dispensed with. Further it is also not disputed that to give effect to this objective , the words except for services consumed wholly within SEZ" were inserted by the amending NN-15/2009 in the exemption NN 9/2009-ST at certain places. The insertion of clause providing complete relief regarding the wholly consumed services cannot be construed as mere technical condition. It is also not procedural in nature. Therefore the ratio of judgment in the case of Mangalore Chemical Fertilizers limited vs deputy Commissioner [1991 (55) ELT 437 (SC)] r....
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.... apply for the said two services, the applicability of the default list retrospectively in respect of the said two service is not as per law. Therefore, for the period prior to 23/02/2011, the appellant is not entitled to claim refund of service tax paid on Scientific Technology Consultancy Services & Customs House Agent Services, as it failed to comply with the proviso (a) of the notification No 9/2009-ST. 4.5 The appellant has submitted that the invoices pertaining to the "employees medical insurance" have been taken by the adjudicating authority as the Insurance Auxiliary Service invoices just because of the fact that because of a clerical error, the refund application mentioned the category of service as insurance auxiliary, while the invoices clearly reflected that the services were those of the employee insurance which were covered under the category of general insurance services. The appellant has not enclosed the copy of the said invoices to substantiate its claim though they made two written submissions regarding the appeal under consideration. Hence I go by the available submissions & evidences on record. The two default lists, approved by the approval committee ....
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.... the claim has been made, are not mentioned in the list of specified services approved by the SEZ authorities. The scheme of SEZ Act, provides for exemption from payment of all taxes to the developer of SEZ or the Units operating in the SEZ. Notification No 9/20009-ST does not provide for any further exemption but provides a mechanism for operation of the said scheme, where a service provider has provided the taxable services to the Unit located in SEZ, on payment of service tax. The conditions specified in the sad notification need to be read accordingly. Article 265 of the Constitution clearly lays down that "No taxes can be levied without the authority of law." When the developer of SEZ and units located in the SEZ have been given exemption from payment of all the taxes then any levy and collection of the taxes from such units is without any authority in law and thus contravenes the Article 265. In such a scenario, the amount so collected needs to be refunded to the person from whom such tax has been collected. The condition specified in proviso (a) to the notification only provides a manner for verification that the services in respect of which the refund claim has been made we....
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.... prescribed under the SEZ Act for seeking exemption from service tax and the letter dated June 19, 2008. The output services rendered by the SEZ unit of the appellant is for authorized operations. It is not the case of the Department that the output services have been used for services other than authorized operations nor any finding to this effect has been recorded. Thus, the service tax paid on all input services used for rendition of such output services are available for claim of refund in terms of the substantive provisions of the SEZ Act. 44. In any case, the conditions imposed by the notifications issued under the provisions of the Finance Act are merely directory in nature. 45. This issue has been considered time and again. In Mast Global Business Services India Pvt. Ltd. v. Commissioner of Central Tax [2018-TIOL-3115-CESTAT-BANG], the Tribunal held that the SEZ Act had an overriding effect, in view of the provisions of Section 51 of the SEZ Act, over all other laws and, therefore, the ground for rejecting the refund claims was not tenable in law and even otherwise, approval from UAC was only procedural in nature and not a mandatory condition. The relevant....
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.... per SEZ Act vide section 51 of the SEZ Act which has an overriding effect over the provisions of any other law. Further, I find that it is only a procedural requirement to get the approval from the Unit Approval Committee and is not a mandatory condition as per the SEZ Act which has an overriding effect over other laws." (emphasis supplied) 47. In SE Forge Ltd. v. Commissioner of Central Excise, Coimbatore [2019 (365) E.L.T. 560 (Tri. - Chennai)], a Division Bench of the Tribunal observed that in view of the provisions of Section 26 of the SEZ Act, the notifications issued under the Finance Act cannot deprive a person from exemption of service tax. The Tribunal further held that the requirement for obtaining approval of UAC is only a procedural requirement for claiming the substantive benefit of exemption from service tax. The Department was, therefore, not justified in rejecting the claim. The relevant portion of the decision is reproduced below : "5. The issue that arises for consideration is whether the appellant is eligible for refund of service tax paid on Renting of Immovable Property Service. The original authority has rejected the refund on the g....
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....SEZ Act itself exempts goods and services supplied for authorised operations to developers and units in the SEZs from the Customs Duty, Central Excise Duty and Service Tax. The provisions of SEZ Act prevail over any other law. Section 26(1) of the SEZ Act, 2005 reads as follows : 26. (1) Subject to the provisions of sub-section (2), every Developer and the entrepreneur shall be entitled to the following exemptions, drawbacks and concessions, namely :- (a) exemption from any duty of customs, under the Customs Act, 1962 or the Custom Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or service provided in, a Special Economic Zone or a Unit, to carry on the authorised operations by the Developer or entrepreneur; (b) exemption from any duty of customs, under the Customs Act, 1962 or the Customs Tariff Act, 1975 or any other law for the time being in force, on goods exported from, or services provided, from a Special Economic Zone or from a Unit, to any place outside India : (c) exemption from any duty of excise, under the Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or any other law for the time....
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....uty 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." C. Mumbai Bench in case of ECLERX Service Ltd [2023 (72) GSTL 99 (T-Mum) Affirmed in 2023 (72) GSTL 4 (Supreme Court)] held as follows: 2. It was alleged that between June 2009 and February 2011, the appellant herein had rendered "taxable service‟ valued at Rs. 80,16,46,587 on which the liability of Rs. 8,25,69,598 should have been discharged and, in accordance with Notification No. 9/2009-S.T., dated 3rd March 2009 and as amended by Notification No. 15/2009-S.T., dated 20th May 2009, claimed as a refund thereafter upon compliance with the conditions specified therein. Likewise, it was alleged that for the period from 1st March 2011 to 14th June 2011, the appellant herein had rendered....
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....riff Area into a Special Economic Zone or Unit or services provided in a Special Economic Zone or Unit by the service providers located outside India to carry on the authorised operations by the Developer or entrepreneur; (e) exemption from service tax under Chapter-V of the Finance Act, 1994 on taxable services provided to a Developer or Unit to carry on the authorised operations in a Special Economic Zone; (f) exemption from the securities transaction tax leviable under section 98 of the Finance (No. 2) Act, 2004 in case the taxable securities transactions are entered into by a non-resident through the International Financial Services Centre; (g) exemption from the levy of taxes on the sale or purchase of goods other than newspapers under the Central Sales Tax Act, 1956 if such goods are meant to carry on the authorised operations by the Developer or entrepreneur. (2) The Central Government may prescribe the manner in which, and the terms and conditions subject to which, the exemptions, concessions, drawback or other benefits shall be granted to the Developer or entrepreneur under sub-section (1). of Special Economic Zones Act, 2005. It i....