Custom, Excise & Service Tax Tribunal
M/S Diamond & Gem Development ... vs Commissioner (Appeals) Of Central ... on 27 March, 2018
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad ~~~~~ Appeal No : ST/13863/2013 (Arising out of OIA NO. SUR-EXCUS-001-APP-307/13-14 dated 26.08.2013 passed by Commissioner (Appeals-I), Central Excise-Surat) M/s Diamond & Gem Development Corporation : Appellant (s) Vs Commissioner (Appeals) of Central Excise and Service Tax, - Surat-I : Respondent (s)
Represented by:
For Appellant (s) : Shri M. N. Makhania, CA For Respondent (s): Shri L. Patra, AR CORAM :
Dr. D. M. Misra, Hon'ble Member (Judicial) Date of Hearing: 29.11.2017 Date of Decision:27.03.2018 ORDER No. A/10602 / 2018 Per : Dr. D. M. Misra This is an appeal filed against the order-in-appeal No. SUR-EXCUS-001-APP-307/13-14 dated 26.08.2013 passed by Commissioner (Appeals-I), Central Excise-Surat.
3. Briefly stated the facts of the case are that the appellant had provided Repair & Maintenance Service and Renting of Immovable Property Service to the units located in SEZ during the period 03.03.2009 to 20.05.2009. They have filed refund claim of the service tax paid on such services in Form A-2 under Notification No. 9/2009-ST dated 03.03.2009 on 09.02.2012. In the refund application, it is claimed that the service tax was paid by the appellant which were wholly consumed inside the SEZ, but, the same was not collected from the service receivers and paid upon the remarks of the Audit team of service tax department. The adjudicating authority rejected the refund claim. Aggrieved by the said order, they filed appeal before the Ld. Commissioner (Appeals), who inturn, also rejected their refund claim. Hence, the present appeal.
4. Ld. Chartered Accountant for the appellant submits that there is no dispute of the fact that the appellant had provided Repair & Maintenance Service and Renting of Immovable Property Service to the units situated in SEZ, and the said services had been fully consumed with the SEZ Area. It is his contention that the Notification No. 9/2009-ST dated 03.03.2009, even though, provides a mechanism in allowing exemption from payment of service tax by way of refund to the service receiver, however, since the appellant has provided the services which were consumed with the SEZ Area, therefore, eligible to the refund of service tax consumed in SEZ. In support, they have referred to the judgements of this Tribunal in the case of Zydus Hospira Oncology (P) Ltd. Vs. CCE, Ahmedabad [2013] 34 taxman.com 16 (Ahmedabad-CESTAT) and Zydus BSV Pharma (P) Ltd. Vs. CST-Ahmedabad [2013] 35 taxman.com 190 (Ahmedabad-CESTAT).
5. Ld. AR for the Revenue on the other hand submitted that it is very clear from the Notification No. 9/2009-ST dated 03.03.2009 that the exemption from payment of service tax on providing taxable services to an SEZ is allowed subject to fulfilment of the conditions and it is by way of refund of the service tax paid by the service provider to the service receiver. It is the receiver, who is entitled to refund and not the service provider, hence, the appellant being the service provider is not eligible to the exemption. Further, he has submitted that the judgement delivered by the Tribunal in the case of Tata Consultancy Services Ltd vs. CCE & ST (LTU), Mumbai 2013 (29) STR 393 (Tri.- Mumbai) has been overruled by the Larger bench of this Tribunal in the case of Sai Wardha Power Ltd. Vs. CCE, Nagpur -2016 (332) ELT 529 (Tri.-LB).
6. Heard both sides and perused the records. The short issue involved in the present appeal is: whether the appellant are entitled to refund of service tax of Rs. 5,94,225/- paid during the period 03.03.2009 to 20.05.2009 in providing Repair & Maintenance Service to various units situated in SEZ. It is not in dispute that the appellant had provided these services to the units in SEZ and claimed the refund under Notification 9/2009-ST dated 03.03.2009. The department rejected the refund claim on the ground that the exemption from payment of service tax of services used in SEZ is allowed by way of refund to the service receiver situated in SEZ. There is no room for any intendment in the interpretation of the said exemption Notification, which has to be strictly interpreted. The only exception carried out in the said notification is that in the event the service provider and service receiver are one and the same person, the service provider could claim the refund of service tax paid on the specified services used in the SEZ. The relevant Notification reads as follows:-
In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), and in supersession of the notification of the Government of India, Ministry of Finance ( Department of Revenue), No. 4/2004-ServiceTax, dated the 31st March, 2004, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section ( i ) dated the 31st March, 2004, vide, G.S.R.248(E), dated the 31st March, 2004, except as respects things done or omitted to be done before such supersession, the Central Government, on being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable services specified in clause (105) of section 65 of the said Finance Act, which are provided in relation to the authorised operations in a Special Economic Zone, and received by a developer or units of a Special Economic Zone, whether or not the said taxable services are provided inside the Special Economic Zone, from the whole of the service tax leviable thereon under section 66 of the said Finance Act:
Provided that
(a) the developer or units of Special Economic Zone shall get the list of services specified in clause (105) of section 65 of the said Finance Act as are required in relation to the authorised operations in the Special Economic Zone, approved from the Approval Committee (hereinafter referred to as the specified services);
(b) the developer or units of Special Economic Zone claiming the exemption actually uses the specified services in relation to the authorised operations in the Special Economic Zone;
(c) the exemption claimed by the developer or units of Special Economic Zone shall be provided by way of refund of service tax paid on the specified services used in relation to the authorised operations in the Special Economic Zone;
(d) the developer or units of Special Economic Zone claiming the exemption has actually paid the service tax on the specified services;
(e) no CENVAT credit of service tax paid on the specified services used in relation to the authorised operations in the Special Economic Zone has been taken under the CENVAT Credit Rules, 2004;
(f) exemption or refund of service tax paid on the specified services used in relation to the authorised operations in the Special Economic Zone shall not be claimed except under this notification.
2. The exemption contained in this notification shall be subject to the following conditions, namely:-
(a) the person liable to pay service tax under sub-section (1) or sub-section (2) of section 68 of the said Finance Act shall pay service tax as applicable on the specified services provided to the developer or units of Special Economic Zone and used in relation to the authorised operations in the Special Economic Zone, and such person shall not be eligible to claim exemption for the specified services:
Provided that where the developer or units of Special Economic Zone and the person liable to pay service tax under sub-section (2) of section 68 for the said services are the same person, then in such cases exemption for the specified services shall be claimed by that person;
(b) the developer or units of Special Economic Zone shall claim the exemption by filing a claim for refund of service tax paid on specified services;
(c) the developer or units of Special Economic Zone shall file the claim for refund to the jurisdictional Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be;
(d)..
(e)..
(f)
7. In the present case, the claimant of refund is not the service receiver, but, the service provider, accordingly, the Ld. Commissioner (Appeals) has rightly upheld the rejection of the refund claim and I do not find any reason to interfere with the said order. Consequently, the impugned order is upheld and the appeal is rejected.
(Order pronounced on27.03.2018) (D. M. Misra) Member (Judicial) G.Y. 5 Appeal No. ST/13863/2013