TaxTMI 
TaxTMI 
2026 (7) TMI 1193
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....efund amount of Rs.14,69,387/-, that the appellant is here before this court. 2. The period involved for the disputed amount pertains to April to June 2015 and July to September 2015. The appellant in terms of Notification No.17/2011 Service Tax dated 1.3.2011 sought exemption from payment of service tax in respect of services that were provided in relation to an SEZ. It is seen from the records of the case and as also submitted by the learned advocate that the prime challenge to the rejected amount is on the grounds that such services are not wholly consumed within SEZ, "services so identified include the services relating to payroll preparation, advising and getting signatures from the authority - stating that these services were in no way connected with the manufacturing activity pertaining to the SEZ. The fact that the appellant has paid the amount of service tax involved in the present appeal is not disputed. It is also not disputed that these services were used for authorized operations in an SEZ. 3. As the crux of the matter concerns interpretation of the notification 17/2011 - ST dated 01.03.2011, it would be apt that the same is reproduced here: Notification....
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....ort of Services Rules, 2005, as are wholly performed within the SEZ; or (iii) services other than those falling under (i) and (ii) above, provided to a Developer or Unit of SEZ, who does not own or carry on any business other than the operations in the SEZ; (b) for the purpose of claiming exemption, the Developer or Unit of SEZ shall obtain a list of taxable services as are required for the authorised operations approved by the Approval Committee (hereinafter referred to as the specified services) of the concerned SEZ; (c) the Developer or Unit of SEZ who does not own or carry out any business other than SEZ operations, shall furnish a declaration to that effect in Form A-1, verified by the Specified Officer of the SEZ, in addition to obtaining list under condition (b) above, for the purpose of claiming exemption; (d) where the specified services received by Unit or Developer, are not wholly consumed within SEZ, i.e., shared between authorised operations in SEZ Unit and Domestic Tariff Area(DTA) Unit, refund shall be restricted to the extent of the ratio of export turnover to the total turnover for the given period to which the claim relates, i.e....
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....tion and or refund under this notification, shall maintain proper account of receipt and use of the specified services on which exemption is claimed, for authorised operations in the SEZ. 3. The following procedure should be adopted for claiming the benefit of the exemption contained in this notification, namely:- (a) the Developer or Unit of a SEZ, who has paid the service tax under sections 66 of the Finance Act, shall avail the exemption by filling a claim for refund of service tax paid on specified services used for the authorised operations; (b) the Developer or Unit of a SEZ who is registered as an assessee under the Central Excise Act, 1944 (1 of 1944) or the rules made there under, or the said Finance Act or the rules made there under, shall file the claim for refund to the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, having jurisdiction over the SEZ or registered office or the head office of the Developer or Unit, as the case may be, in Form A-2; (c) the Developer or Unit of a SEZ who is not so registered under the provisions referred to in clause (b), shall, before filing a c....
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....n such specified services, are true and correct in all respects; (g) the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, after verifying that,- (i) the refund claim is complete in all respects; (ii) the information furnished in Form A-2 and in supporting documents correctly indicate the service tax involved in the specified services used for the authorised operations in the SEZ, which is claimed as refund, and has been actually paid to the service provider, shall refund the service tax paid on the specified services; (h) a service provider, shall provide the specified services falling under 'wholly consumed' category, under exemption granted by this notification, to a Developer or Unit of SEZ, for authorised operations, subject to the production of documents specified in sub-para (b) of para 2 and in addition wherever applicable, documents specified in sub-para (c) para 2, i.e., declaration in Form A-1; (i) where any refund of service tax paid on specified services is erroneously refunded for any reasons whatsoever, such service tax refunded shall be recoverable under the provisi....
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....ground that these services are not wholly consumed within SEZ is incorrect 326 Professional Services HCCA Business Services Pvt. Ltd 1,288 Salary Processing services 403 Professional & Consultancy Charges KVM Advisory Services (P) Limited 4,120 Services in relation to compliance with various statutory requirements of the SEZ Unit 434 PROFESSIONAL SERVICES Simulytics Services 20,600 Software development and implementation of Distribution Requirement Programme (DRP) 445 Professional & Consultancy Charges KVM Advisory Services (P) Limited 4,120 Services in relation to compliance with various statutory requirements of the SEZ Unit 446 PROFESSIONAL SERVICES Lakshmi Kumaran & Sridharan 12,875 Legal Consultancy Services relating to SEZ Unit 623 Professional & Consultancy Charges Prudent Insurance Brokers Pvt. Ltd. 15,450 Insurance Broker Services in relation to insurance requirements 633 Professional & Consultancy Charges KVM Advisory Services (P) Limited 4,120 Services in relation to compliance with various statutory requirements of the SEZ Unit 757 Professional & Consultancy Ch....
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....h various statutory requirements of the SEZ Unit 2389 Professional & Consultancy Charges Lakshmi Kumaran & Sridharan 16,123 Legal Consultancy services for the SEZ Unit 2390 Professional Services HCCA Business Services Pvt. Ltd 2,318 Salary Processing services 2445 Inspection Charges Intertek India Pvt. Ltd. 907 Testing agency providing the testing services in relation to Coal Test 2640 Professional & Consultancy Charges ABC Staffing Solutions 1,803 Recruitment Agency provided services relation to selection of employees for the SEZ unit 2806 Professional Services HCCA Business Services Pvt. Ltd 2,318 Salary Processing services 2816 Professional & Consultancy Charges KVM Advisory Services (P) Limited 4,120 Services in relation to compliance with various statutory requirements of the SEZ Unit 2817 Professional & Consultancy Charges KVM Advisory Services (P) Limited 4,120 Services in relation to compliance with various statutory requirements of the SEZ Unit 3302 Professional Services HCCA Business Services Pvt. Ltd 2,318 Salary Processing services 3307 Professio....
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....ing located in SEZ 30,900 The Appellant has availed the services of the aforesaid Architect for the plant and building situated in the SEZ. The Architect charges service tax on their professional fees which is paid by the Appellant. These services are also certified by the Approval Committee as required for the authorized operations. These services are also received in SEZ and the Appellant is entitled to claim refund of the same. The impugned order rejecting refund of the same merits to be set aside. 4. Services availed from M/s. HCCA Business Services Private Limited in relation to pay roll processing 18,802 The Appellant has outsourced the activities in relation to payroll processing to M/s. HCAA Business Services Private Limited. These activities are in relation to the employees who are engaged in the manufacturing activity and officers and staff. These services are related to the authorised operations of the Appellant and are also has direct nexus with the manufacturing activity 5. Services availed from KVM Advisory Services Private Limited, in relation to in relation to compliance with various statutory requirements of the SEZ Unit 41,200 The App....
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.... The Appellant has availed the services of Simulyties Services for software development This software is in relation to the logistics and used for the authorised operations. 11 . Services availed in connection with third party power purchase through Electricity Exchange 185 These services are in relation of purchase of electricity from private parties through Electricity Exchange. The Appellant has availed the services of. Manikaran Power Limited who do broking services in tins regard. 12 . Professional services received 12,875 The Appellant. These services are in relation to the plant and machinery which are directly used in the manufacture. 13 . Telephone Services availed from M/s. Reliance Communications 1,545 The Appellant has availed mobile telephone services from M/s. Reliance Communications for their communication requirements and pays appropriate service tax on these charges as per the service provider's bills. 7. To appreciate the question regarding consumption of the service vis-à-vis the impugned exemption notification, it would be necessary to also delve into section 26 (1), (e), of the SEZ Act, t....
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....cannot be a case to deny credit or to restrict it in accordance with the export. However, as provided in the notification itself. For a meaningful denial of the notification benefit it was for the lower authorities to show that the services to which operations were put to, were in fact not "authorised operations". There is no such finding in the order of the Ld. Commissioner (Appeals). 9. The fact that the SEZ unit of the appellant is located in a remote area in Tirunelveli, for which they are required to engage vital resources from outside, in respect of which they have made the issue-wise submissions is support of their claim, I am of the view addresses the moot question of utilisation of the various services in authorised operations undertaken by the SEZ unit. It has been held in the appellant's own case that the exemption in terms of section 26(1), (e), is available to carry on authorised operations in a SEZ. The revenue has not contended that the impugned amounts for which the refund was denied in the present appeal was not authorised operations. The notification ibid provides that refund thereof of the service tax paid on the services received by the SEZ unit would be ....
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.... In this regard it be mentioned that the Hon'ble Telangana High Court in the M/s. GMR Aerospace Engineering Ltd. case (supra) has categorically held that the Notification could not be pressed into service to find out whether a unit in a SEZ qualifies for exemption or not. 12. Moreover, the Chennai Bench of the CESTAT in the appellant's own case for a different period vide Final Order No. 41394-41395 of 2021 dated 17.03.2021 [2021 (3) TMI 681CESTAT Chennai, following the decision in M/s. GMR Aerospace Engineering Ltd. (supra), granted the requisite exemption from payment of Service Tax, as operated by virtue of the said notification ibid. As to the charge of not "wholly consumed", within the SEZ thereby implying that the services in question were consumed outside the SEZ, is certainly not made in the notice issued and to which allegation the appellant was never put on notice. Hence the adjudicators cannot derive any benefit out of such a situation. 13. The appellant have also relied upon the decision of the Hon'ble Delhi High Court in the case of M/s. Jindal Stainless Ltd. v. Union of India (2017 (51) STR. 130 (Del.)) wherein it has been categorically held that exe....