TaxTMI 
TaxTMI 
2025 (5) TMI 2097
X X X X Extracts X X X X
X X X X Extracts X X X X
....he balance amount of Rs.10,79,849/-. Aggrieved against the rejection of the part of the refund claim, the appellant preferred appeal before Commissioner (Appeals) who vide the impugned order rejected the appeal. Hence the present appeal. 3. Shri Raghav Rajeev, learned counsel appeared on behalf of the appellant and Shri N. Satyanarayanan, learned Authorize Representative appeared for the respondent-department. 3.1 Aggrieved by the rejection of refund claimed, the Ld. Counsel Shri Raghav Rajeev has summarised the issues involved as below. S. No Reason for rejection Amount Appellant's Submission 1 Misdeclaration of service, Xerox copy of invoice, incomplete address. 2,32,380 OIO and OIA is beyond the Show Cause Notice. 2 Wrong Description of taxable service [Services shared with DTA] 5,54,078 The description proposed by the Department are mentioned in letter dated 26.11.2013 issued by UAC, MPEZ. Hence, refund is eligible. 3 Wrong Description of taxable service [Professional Service] 50,448 Services are in the nature of Management or Business Consultancy Services. Refund is eligible as it is a specified service used....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ma facie I find that there have been around 16 issues raised by revenue in the SCN dated 14.10.2014, relating to their refund claim. It shows a wide spread noncompliance with the rules and procedures. The main plank of the appellants reply is that as per Final Order No. 40664/2023 dated 10.08.2023 in M/s. ATC Tires Private Limited, which is the appellants own case it was held that exemption from payment of Service Tax granted by the SEZ Act cannot be denied on the ground that a procedural requirement under Service Tax Exemption Notifications was not full filled. 4.1 Section 26 of the SEZ Act 2005, provides exemption from payment of service tax on taxable services levied under section 65 of the Finance Act, 1994 (32 of 1994). The said section is reproduced below for ease of refrence. 26. Exemptions, drawbacks and concessions to every Developer and entrepreneur.- (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 (52 of 1962) or the Customs Tariff Act, 1975 (51 of 1975) ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ann.com 103 (A.P.). It held as under; 37. Even if apply the parameters indicated in Girnar Traders [Girnar Traders v. State of Maharashtra - 2011 (3) SCC 1], the case on hand would pass the test. Section 26(1) of the SEZ Act indicates (1) persons who are entitled to exemptions; (2) the duties in respect which exemption is available; (3) the circumstances under which exemption is available and (4) the provisions of law subject to which the exemptions are available. To put it in simple terms, Section 26(1) identifying the persons, who are eligible for exemption. They are the Developer and entrepreneur. Section 26(1) identifies the duties from which exemption is available. They are the duties under the Customs Act, Customs Tariff Act etc. Section 26(1) also indicates the circumstances under which the exemptions are available. These circumstances vary from clause to clause under Section 26(1). This can be best understood by providing a tabulation as follows : Duty exempted Circumstances under which exempted (1) Duty under Customs Act, 1962 (1) on goods imported into or services provided in a special economic zone or a unit to carry on the authorised operations by t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ise, at para 15.3.1, has examined the issue relating to the exemption granted to SEZ from indirect taxes. The issue pertains to when the services provided by units from the DTA are utilized by the Developer or Unit outside the SEZ enclave, which is a penumbra area for the application of the SEZ Act and there is a possibility of misuse of the exemption, due to territorial jurisdiction issues of levy, supervision etc. The Act and Rules hence need to be interpreted strictly. 4.4 Both section 26 and 53 of the SEZ Act came to be examined by the Principal Bench of this Tribunal in M/S PRESTIGE POLYMERS PVT. LTD., Vs COMMISSIONER OF CUSTOMS, INDORE (M.P.) [2025 (3) TMI 15 - CESTAT NEW DELHI]. Relevant portionof the Order is extracted; 18. Section 51 of the SEZ Act overrides any contrary provisions in the other laws. It reads as follows: Section 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. 19. Evidently, section 51 of SEZ Act does not nega....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ustice to an aggrieved appellant, knocking at its doors. But this should not open the door for unscrupulous persons to evade taxes, even otherwise such non-compliance should not become a habit as this laxity may permeate to other branches of the appellants organisation. Hence it is for the parties concerned to ensure that their activity comply with the provisions of law. Procedural violations if any should be an exception on unavoidable grounds and not become the rule, purportedly sanctified by judgments rendered considering the peculiar facts of a case. Furter as stated in RPP Infra Projects Ltd. (Supra); "15.3.3 . . . . there is some force in the contention of Revenue that the discretion of Government to regulate the manner in which the tax exemption is availed cannot be held to be redundant. Regulation helps ensure that the exemption achieves its intended goal. It also ensures that no injury is caused to the trade in the domestic tariff area (DTA), due to inadvertence or by wrongful acts of the beneficiaries of the exemption in the SEZ enclave and is founded upon the fundamental principle of justice and good sense. The presumption in law is that Government makes policy ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....respect to the substance essential to every reasonable objective of the statute" and the court should determine whether the statute has been followed sufficiently so as to carry out the intent of the statute and accomplish the reasonable objectives for which it was passed. Fiscal statute generally seeks to preserve the need to comply strictly with regulatory requirements that are important, especially when a party seeks the benefits of an exemption clause that are important. Substantial compliance of an enactment is insisted, where mandatory and directory requirements are lumped together, for in such a case, if mandatory requirements are complied with, it will be proper to say that the enactment has been substantially complied with notwithstanding the non- compliance of directory requirements. In cases where substantial compliance has been found, there has been actual compliance with the statute, albeit procedurally faulty. The doctrine of substantial compliance seeks to preserve the need to comply strictly with the conditions or requirements that are important to invoke a tax or duty exemption and to forgive non-compliance for either unimportant and tangential requirements or requ....