TaxTMI 
TaxTMI 
2022 (8) TMI 1557
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....on to avail the benefit of the said notification, which I find the appellant failed to do so. Hence, the applicant has failed to meet out the basic mandatory requirement for claiming refund of service tax that is the approval. This is mandatory requirement and not procedural lapse which is condonable. ............... ................ ORDER I hereby uphold the impugned Order in Original No. 04/2014/Refund/ST/Dn. Mihan dated 24.03.2015 passed by the Assistant Commissioner, Central Excise, Customs & Service Tax, Division Mihan, Nagpur, and reject the appeal of the appellant." 2.1 This appeal was earlier heard by this Tribunal and the Tribunal had vide its final order No. A/87886/2016-WZB/SMB dated 10.06.2016 dismissed the appeal filed by the appellant observing as follows:- "4. I have gone through the rival submissions. I find that in the case of Mahindra Engineering Services (supra), cited by the counsel, the argument that the said notification is an exemption notification and therefore, at the time to avail the exemption, the conditions of notification have to be fulfilled, was not taken by the Revenue. In the instant case, I find ....
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....the earlier proceedings were decided would not be a sufficient ground to disregard an earlier adjudication made on merits. It would be open for the Tribunal in subsequent proceedings to doubt the correctness of the view earlier taken and refer the question to a Larger Bench but it would not be permissible to disregard the earlier view on the ground that a particular contention was not raised when the earlier order was passed. 6. Since we prima facie find that the appellant was justified in relying upon the earlier decision of the Tribunal in Mahindra Engineering Services Ltd. (supra) and that the Tribunal was not justified in disregarding its earlier order, we find that reconsideration of the proceedings by the Tribunal is warranted in this backdrop. Accordingly the substantial question of law as framed is answered by holding that the Customs, Central Excise and Service Tax Appellate Tribunal ought to have considered the effect of its earlier decision in Mahindra Engineering Services Ltd. (supra). If it was of the opinion that said view required reconsideration, the option of referring that question to a Larger Bench ought to have been exercised. In view of the aforesaid a....
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.... approved. ● In view of the settled position in law vis-à-vis the same notification and the decisions, the appeal be allowed. 3.3 Arguing for the Revenue, learned AR submits that:- ● Notification No. 12/2013 and Notification No. 09/2009-ST dated 03.03.2009 are distinctly different from each other and hence the Tribunal was justified in dismissing the appeal in the earlier instance. Pointing out the above distinction he stated:- "(I) (A) Notification No. 12/2013 dated 01.07.2013 has a provision of exemption from payment services tax on the specified services by two way:- (i) Exemption by way of refund of Service Tax paid on the specified services received by the SEZ unit or developer and used for authorized operations. (Paragraph 2) (ii) Exemption by way of ab initio non payment of Service Tax on the specified services received by the SEZ unit or the developer and are used exclusively for authorized operation. (Proviso to Para 2) (B) whereas Notification No. 09/2009 dated 03.03.2009 has provision of exemption of service tax paid on the specified services by way of Refund only (Clause (c) ....
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....id or prevent such situation. Further, also with a view to maintain discipline in such exemption matter, this manner of procedure is applied in both cases of exemptions and is applied mandatorily. (B) The conditions mentioned under the notifications (09/2009) are applicable on the issue of refund of Service Tax only. Although, it cannot be inferred that any kind of manner or sequence is to be followed while claiming refund if all conditions are fulfilled, it appears to be logical to get an approval of specified service from approval committee prior to initiating service activity. The Courts have shown leniency and allowed refund in many cases when all the conditions are simply followed. (V) (A) The claim of refund shall be filed within one year from the end of the month in which actual payment of service tax was made. (B) The claim of refund shall be filed within 6 months from the end of the month in which actual payment of service tax was made." 4.1 I have considered the impugned order along with the submissions made in appeal and during the course of argument, as per the direction of the Hon'ble High Court. 4.2 The issue involved is not whether th....
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....t to which, the exemptions, concessions, drawback or other benefits shall be granted to the Developer or entrepreneur under sub-section (1)." Section 51 of the SEZ Act further provides overriding effect to the provisions of the SEZ Act and it is reproduced below : "51. Act to have overriding effect. - The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act." Section 55 of the SEZ Act gives power to the Central Government to make rules for carrying out the provisions of the Act. In exercise of the aforesaid powers, the Central Government made "The Special Economic Zones Rules, 2006" Rule 31 deals with the exemption from payment of service tax and is reproduced below : "The exemption from payment of service tax on taxable services under Section 65 of the Finance Act, 1994 (32 of 1994) rendered to a Developer or a Unit (including a Unit under construction) by any service provider shall be available for the authorized operations in a Special Economic Zone." Further Notification No. 9/2009-....
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..... Section 51 of the SEZ Act provides for an overriding effect to the provisions of the SEZ Act. The provisions of Section 26 read with Rule 31 of the SEZ Rules thus, have overriding effect over anything inconsistent contained in any other law for the time being in force, which would include the Finance Act. It needs to be noted that the Notification dated March 3, 2009 has been issued in exercise of the powers conferred by Section 93 of the Finance Act. Thus, when the services rendered by the appellant are fully exempted from service tax in terms of the provisions of the SEZ Act, the condition of exemption by way of refund imposed under the Notification issued under the Finance Act would be inconsistent with the provisions of the SEZ Act. It also needs to be noted that the SEZ Act was enacted in 2005, much after the enactment of the Finance Act in 1994. This issue was examined by the Telangana and Andhra Pradesh High Court in GMR Aerospace Engineering Limited and Another v. Union of India and Others [2019 (8) TMI 748 = 2019 (31) G.S.T.L. 596 (A.P.)]. The Andhra Pradesh High Court observed as follows : "22. It may be noted that sub-section (1) of section 2....
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....and conditions prescribed in the Customs Act, 1962, the Customs Tariff Act, 1975, the Central Excise Act, 1944, the Central Excise Tariff Act, 1985 and the Finance Act, 1994. This is especially so, since the authority of the Central Government to prescribe the terms and conditions subject to which exemptions may be granted under section 26(1), flows only out of sub-section (2) of section 26. The word "prescribe" is verb. Generally no enactment defines the word "prescribe" but the SEZ Act, 2005 defines the word "prescribe" under section 2(w) to mean the rules framed by the Central Government under the SEZ Act, 2005. The space is also not left unoccupied, as the Central Government has issued a set of rules known as "the Special Economic Zones Rules, 2006", wherein the Central Government has prescribed the terms and conditions for grant of exemptions under rule 22. Therefore, there is no question of comparing the terms and conditions prescribed in rule 22 with the terms and conditions prescribed in the Notifications issued under any one of the five enactments listed in section 26(1) to find out whether there was any inconsistency. 34. The benefit of exemptions granted under t....
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....the Notification dated March 3, 2009 were satisfied or not for grant of any exemption from service tax. Section 26(2) of the SEZ Act does provide that the Central Government may prescribe the manner in which, and the terms and conditions subject to which, the exemptions shall be granted to the Developer under sub-section (1) but what is important to notice, and as was also observed by the Andhra Pradesh High Court, the word "prescribe" would mean "prescribed by rules made by the Central Government under the SEZ Act," in view of the definition of "prescribed" under section 2(w) of the SEZ Act. The Notification dated March 3, 2009, which has been issued under section 93 of the Finance Act, therefore, has no application." 13. Learned Authorized Representative of the Department has, however, placed reliance upon sub-rule (5) of Rule 47 of the SEZ Rules that was inserted w.e.f. August 5, 2016 to contend that the aforesaid two notifications issued under Finance Act would be applicable. This submission of Learned Authorized Representative of the Department cannot be accepted. It is by a notification dated August 5, 2016 that in Rule 47, sub-rule (5) was inserted after sub-rule (4....
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....pon by the appellant clearly hold that the SEZ Act has a overriding effect over other laws. Therefore, this ground on the basis of which refund claims have been rejected is not tenable in law." 15. It was also held in M/s. ONGC Mangalore Petrochemicals Limited v. Commissioner of Central Excise & Central Tax, Mangalore Commissionerate [2019-VIL-140-CESTAT-BLR-ST], the Tribunal again held : "6. After considering the submissions of both the parties and perusal of the material on record, I find that the appellant being SEZ is entitled to refund of Service Tax paid on input service used for authorized operations. Further, I find that as per Notification No. 12/2013-S.T., dated 1-7-2013, the only requirement is that the appellant is required to file the list of approved services which have been used by them for authorized operations. Further, in this case, I find that the appellant has subsequently obtained the approval from the Unit Approval Committee of the SEZ and the said certificate is placed on record but the Commissioner (A) has held that the said approval was obtained from the competent authority on 25-10-2011 and therefore, after the approval, he has allow....
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....nditions of the notification cannot be pressed into application to deny the refund to a SEZ Unit. Para 21 of the said decision reads as under :- "Thus, what follows is that the Commissioner was not justified in examining whether the conditions set out in the Notification dated March 3, 2009 were satisfied or not for grant of any exemption from service tax Section 26(2) of the SEZ Act does provide that the Central Government may prescribe the manner in which, and the terms and conditions subject to which, the exemptions shall be granted to the Developer under sub-section (1) but what is important to notice, and as was also observed by the Andhra Pradesh High Court, the word "prescribe" would mean "prescribed by rules made by the Central Government under the SEZ Act," in view of the definition of "prescribed" under section 2(w) of the SEZ Act. The Notification dated March 3, 2000, which has been issued under section 93 of the Finance Act, therefore, has no application." This Tribunal in the case of M/s. ATC Tyres Pvt. Ltd. v. Commissioner of GST & CE, Tirunelveli reported in 2021-VIL-106-CESTAT-CHE-ST had considered the very same issue of limitation mentioned in the....
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....ined approval for the said services, we find that the error would only be a procedural infraction which can be condoned. The substantive benefit cannot be denied for a procedural lapse. The claim of Rs. 967/- being given up by appellant is not considered in this appeal." In the case of EYGBS (India) LLP (supra), the Tribunal has observed as follows:- "5. I have considered the rival contentions and have gone through the orders relied upon during the course of arguments; and I am prima facie convinced that the Revenue has not denied the fact that the services in question were used by the SEZ unit for its authorized operations. Hence, the denial of refund for want of documents is not sustainable. 6.1 The Learned Bangalore Bench of the CESTAT in the case of M/s. Mast Global Business Services India Pvt. Ltd. (supra) has considered the case of a similarly placed taxpayer and held as under: "6.1 After considering the submissions of both sides and perusal of material on record, I find that the show cause notices were issued on two grounds viz. certain input services are not covered in the definition of input service under Rule 2(l) of CENVAT Credit ....