Whether refund can be rejected on non submission of approved list of authorised operations by SEZ unit.

PJ/Case Law /2016-17/3264

Case:- MAKERS MARTVersusCOMMISSIONER OF C. EX. & S.T., JAIPUR

Citation:- 2016 (43) S.T.R. 309 (Tri. - Del.)

Brief Facts:- The brief facts are that rejection of the refund of Rs. 51,298/- was upheld on the ground that list of specified services required in relation to the authorised operation in the Special Economic Zone (SEZ) as approved by the Approval Committee is primary and foremost condition for sanction of refund claim for the want of which the primary adjudicating authority rightly rejected the refund claim in terms of Notification No. 9/2009-S.T. The refund of Rs. 45,052/- was rejected by the appellate authority on the ground (i) part of the refund Rs. 3,584/- was time-barred as the refund claim was filed after expiry of six months from the date of making actual payment of service tax and (ii) list of specified services required in relation to the authorised operations in SEZ as approved by the approval committee is required to be submitted with the application for refund in terms of para 2(g)(i) of Notification No. 9/2009-S.T. which was not submitted. As regards the refund of Rs. 62,109/-, it was rejected on the ground of non-submission of list of specified services required in relation to the authorised operations in SEZ as approved by the Approval Committee which was required to be submitted along with the application for refund in terms of para 2(g)(i).

Appellant’s Contention:- The appellant has contended that the ground of rejection namely non-submission of list of authorised operations was considered by CESTAT in the case of Intas Pharma Ltd. v.C.S.T. - 2013(32) S.T.R 543 (Tri. - Ahmd.) and was found to be untenable. As regards the time-bar, the appellant stated that Commissioner (Appeals) was fully empowered to condone the delay in filing claims which in these cases should have been condoned. We have considered the contentions of the appellant. As regards the ground of non-submission of the approved list of authorised operations which is a condition in Notification No. 9/2009-S.T.,

Respondent Contention:- The respondent (AR), the claim for refund certified within 6 months or such extended period as the Asst. Commissioner of Central Excise or the precursors and excise as the case may be shall permit from the date of actual payment of service tax by such developer or unit to service provider. Having regard to the nature of refunds and quantum of delay, we are of the view that the delay not being unreasonable deserved to be condoned in terms of the aforesaid para 2(f) of Notification No. 9/2009-S.T.

Reasoning of Judgment:- The Act, considered in the light of the overarching provisions of Sections 7 and 26(e) of the 2005 Act, the conclusion appears compelling that neither Notification 9/2009 nor 15/2009 disentitle immunity to Service Tax enjoined by the provisions of the 2005 Act. It therefore appears that Notification Nos. 9/2009 and 15/2009 merely contour the process by which the benefit of exemption/immunity to tax is operationalised. Notification Nos. 9/2009 and 15/2009 have provided a facilitative regime whereby a developer or units of SEZ, as recipients of taxable service are enabled the facility of claiming refund of Service Tax, remitted by taxable service providers in relation to the taxable services provided to a unit in a SEZ. On this harmonious construction, the immunity to Service Tax provided under Section 7 or 26 of the 2005 Act cannot be so interpreted as to be eclipsed the procedural prescriptions of Notification No. 9/2009 or 15/2009. These Notifications are calibrated to enable recipients of taxable services (exempt from liability to tax under the provisions of the 2005 Act), to claim refund of the Service Tax, wherever assessed and collected by Revenue or remitted otherwise by the taxable service provider, inadvertently. Considered in the light of this analysis, the substituted provisions, of clause/sub-paragraph ‘c’ of Notification No. 15/2009 cannot be inferred to have imposed any disability on the recipient of services consumed wholly within the SEZ, from seeking refund of Service Tax remitted on such transactions, by the providers of such services.

Decision:-The appeal is accordingly allowed.

Comment:-The gist of the case is that the immunity to Service Tax provided under Section 7 or 26 of the 2005 Act cannot be so interpreted as to be eclipsed the procedural prescriptions of Notification No. 9/2009 or 15/2009. These Notifications are calibrated to enable recipients of taxable services to claim refund of the Service Tax, wherever assessed and collected by Revenue or remitted otherwise by the taxable service provider, inadvertently. The substituted provisions, of clause/sub-paragraph ‘c’ of Notification No. 15/2009 cannot be inferred to have imposed any disability on the recipient of services consumed wholly within the SEZ, from seeking refund of Service Tax remitted on such transactions, by the providers of such services.

Prepared by:- Bharat

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PJ/Case Law /2016-17/3264

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