Custom, Excise & Service Tax Tribunal
Intas Pharma Ltd vs Service Tax - Ahmedabad on 3 August, 2018
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
West Zonal Bench, Ahmedabad
Appeal No. ST/712-714/2010-DB
Date of
Case No Impugned Order Detail's Impugned Passed By Appellant Respondent
Order Commissioner of OIA- C.S.T.-Service ST/712/2010- Service Tax- Intas 307/2010/STC/MM/COMMR- 16/09/2010 Tax -
DB SERVICE TAX - Pharma Ltd
A-/AHD Ahmedabad
AHMEDABAD
Commissioner of
OIA- C.S.T.-Service
ST/713/2010- Service Tax- Intas
302/2010/STC/MM/COMMR- 15/09/2010 Tax -
DB SERVICE TAX - Pharma Ltd
A-/AHD Ahmedabad
AHMEDABAD
Commissioner of
OIA- C.S.T.-Service
ST/714/2010- Service Tax- Intas
308/2010/STC/MM/COMMR- 17/09/2010 Tax -
DB SERVICE TAX - Pharma Ltd
A-/AHD Ahmedabad
AHMEDABAD
Represented by:
For the appellant : Shri Dhaval K. Shah, Advocate
For the respondent : Shri Gobind Jha, Supdt. (AR)
CORAM:
Hon'ble Mr. Ramesh Nair, Member (Judicial)
Hon'ble Mr. Raju, Member (Technical)
Date of Hearing/Decision: 03.08.2018
ORDER NO. A/11849-11851/2018
Per: Ramesh Nair
The issue involved in the present case is that in respect of services consumed within the SEZ unit, whether the Service Tax paid on such services is refundable even before the amendment of notification 09/2009-ST by amendment notification no. 15/2009-ST dated 20.05.2009.
2. Shri Dhaval Shah, Ld. Counsel appearing on behalf of the appellant submits that he relied upon judgments as follows:
1. Sears IT & management Services (I) Pvt. Ltd. vs Commr. Of Central Excise., Pune-III 2018 (8) G.S.T.L. 425 (Tri.- Mumbai) 2 ST/712-714/2010-DB
2. Intas Pharma Ltd. Vs Commissioner of Service Tax, Ahmedabad 2013 (32) STR 543 (Tri.- Ahmd.)
3. Zydus Tech Ltd. Vs. Commissioner of Service Tax, Ahmedabad 2013 (30) STR 616 (Tri. - Ahmd.)
4. Zydus Technologies Ltd. Vs. Commissioner of Service Tax, Ahmedabad 2013 (39) STR 657 (Tri. - Ahmd.)
5. Commissioner of Service Tax, Ahmedabad-III Vs. Nahar Granites Ltd.
2014 (305) ELT 9 (Guj.) He submits that even after if refund is not covered under Notification 15/09- ST, this tribunal has held that since the Service Tax was not payable and infact paid the same is refundable under section 11B of the Central Excise Act, 1944.
3. Shri Gobind Jha, Ld. Supdt. (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.
4. We have carefully considered the submissions made by both the sides.
We find that identical issue had come up before Mumbai Tribunal in the case of Sears IT And Management Services India Private Ltd. wherein the tribunal has passed the following order:
"4. We have carefully considered the submissions made by both the sides. We find that clause (C) to the notification no. 09/2009-S.T. as amended by Notification 15/2009-S.T. reads as under:
"(c) the exemption claimed by the developer of 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 authorized operations in the Special Economic Zone except for services consumed wholly within the Special Economic Zone."
From the plain reading of the aforesaid clause (c) of the Notification No. 09/2009-S.T., it is clear that the exemption by way of refund is not available to the services consumed wholly within the Special Economic Zone however as per the first para of the refund is not available to the services provided in relation to authorized operations 3 ST/712-714/2010-DB in a SEZ and received by SEZ unit are exempted therefore the services received by the appellant even though consumed wholly within the SEZ are exempted per se. However, the refund in respect of Service Tax was paid on such services is not governed by Notification No. 96/2009-ST but the service tax otherwise not required to be paid on the services which are otherwise within the SEZ. In the facts of the present case there is no dispute that the Service Tax was paid on such services which are otherwise exempted. Therefore, the appellant is entitled for refund but not under Notification No. 09/2009-ST but under Section11B of the Central Excise Act, 1944. We therefore direct the adjudicating authority to proceed the refund claim of the appellant under the provisions of Section 11B of the Act. The appeals are allowed by way of remand to the adjudicating authority for passing a fresh order on the claim of the refund made by the appellant in the above terms.
4.1 A similar issue has been taken by this Tribunal in the appellants own case reported at 2013(32) S.T.R. (543) the relevant order is reproduced below:
"6.It requires to be noticed that exercising powers under Section 93(1) of the Act, Government issued a Notification exempting the taxable services specified in Section 65(105) of the Act, when provided in relation to authorized operations in a Special Economic Zone and received by the developers of units in the SEZ, whether or not the said taxable services are provided inside the SEZ, from the whole of the Service Tax leviable thereon under Section 65 of the Act. Clause „c‟ of this Notification (15/2009-S.T.) substitutes clause „c‟ of earlier Notification No. 9/2009-S.T., dated 3-3-2009. Clause „c‟ of Notification 9/2009-S.T. provides that the exemption claimed by the developer or units of SEZ shall be provided by way of refund of Service Tax of the specified services used in relation to authorized operations in the SEZ. Notification No. 9/2009-S.T. was issued on 3-3-2009, in supersession of an earlier Notification No. 4/2004-S.T. Subsequently by Notification No. 15/2009-S.T., dated 20-5-2009, amendments to the earlier Notification (9/2009-S.T.) were issued. Accordingly, para „c‟ of the earlier Notification (9/2009-S.T.) was substituted to read that the exemption claimed by the developer or units of SEZ shall be provided by way of refund of Service Tax paid on the specified services used in relation to the authorized operations in the SEZ, except for services consumed wholly within the SEZ.
7. We notice that the Special Economic Zones Act, 2005 (Central Act 28 of 2005) was enacted providing for SEZ within the territory of India and for providing inter alia immunities/exemptions from taxes/duties/cesses. Section 7 of the 2005 Act enjoins that any goods or services exported outside, or imported into, or procured from the domestic tariff area, by a unit in SEZ or a developer shall, subject to such terms and conditions and limitations, as may be prescribed be exempted from payment of taxes/duties/cesses under all enactments 4 ST/712-714/2010-DB specified in the First Schedule. The First Schedule does not enumerate the Act (Finance Act, 1994) as among the enactments in respect of which exemption from taxes/duties or cesses is available under Section 7 of the 2005 Act. However, Section 26(1)(e) enacts that subject to the provisions of sub-section (2) thereof, every developer and entrepreneur shall be entitled to exemption from Service Tax under Chapter (V) of the Act on taxable services provided to a developer or unit to carry on the authorised operations in a SEZ.
8. In view of the legislated exemption supra and since provisions of the 2005 Act are provided an overriding effect vide Section 51; and absent any provision in the Act which eclipses the overarching trajectory of the 2005 Act, the immunity to Service Tax in respect of taxable services provided in relation to SEZ is a legislatively enjoined immunity. Therefore, any Service Tax paid/remitted by a service provider is liable to be refunded to the provider who has remitted Service Tax in relation to taxable services provided to a developer or unit, to carry on authorized operations in a SEZ.
9. However, the issue in this case is refund claimed by the petitioner as the recipient of the taxable service of Architect, Interior Decorator and Consulting Engineer, i.e. in respect of those services provided to the appellant by M/s. Venkataramanan Associates. Notification No. 9/2009-S.T., dated 3-3-2009 as earlier adverted to, enables claim of exemption by developers or units in SEZ by way of refund of Service Tax paid for services used in relation to authorized operations in SEZ, insofar as the claim for refund is filed within six months or within such extended period as the Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be, shall permit.
10. Insofar as Notification No. 15/2009-S.T. is concerned, Para „c‟ of the earlier Notification No. 9/2009-S.T. was substituted. The current requirement is that the exemption claimed by the developer or units of SEZ shall be provided by way of refund of Service Tax paid on the specified services used in relation to the authorised operations in the SEZ, except for services consumed wholly within the SEZ.
11. On true and fair construction of Notifications 9/2009 and 15/2009 issued under Section 93(1) of 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
5 ST/712-714/2010-DB 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.
12. Therefore, the rejection of the appellant‟s claim by the adjudicating authority and affirmation of such rejection by the Commissioner (Appeals), to the extent Rs. 56,650/-, in relation to Architect, Interior Decorators and Consulting Engineer services provided by M/s. Venkataramanan Associates, is unsustainable and is so declared. The order impugned herein namely the Order-in-Appeal dated 29-10-2012 is set aside. Appellant shall be entitled to refund of Rs. 56,650/-.
13. Appeal is allowed accordingly. No costs."
5. In view of above judgments, the issue is no longer res integra. Therefore, following the above decisions, we modify the impugned order. The appeals are allowed.
(Dictated and pronounced in the open Court)
(Raju) (Ramesh Nair)
Member (Technical) Member (Judicial)
DS