Custom, Excise & Service Tax Tribunal
Vedanta Ltd vs Rourkela Commissionerate on 4 February, 2020
IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE
TRIBUNAL, KOLKATA
EASTERN ZONAL BENCH : KOLKATA
REGIONAL BENCH - COURT NO.2
Service Tax Appeal No.78799 of 2018
(Arising out of Order-in-Appeal No.102/ST/RKL-GST/2018 dated 29.06.2018 passed
by Commissioner(Appeals), GST, CX & Customs, Bhubaneswar.)
M/s. Vedanta Limited (SEZ Unit)
(Burkhammunda, Dist. Jharsuguda, Odisha-768201.)
...Appellant
VERSUS
Commissioner of CGST & CX, Rourkela Commissionerate
.....Respondent
(Central Revenue Building, Rourkela Commissionerate, Nayabazar, Rourkela, Dist.-Sundargarh, Odisha-769004.) APPEARANCE Shri K.K.Acharya, Advocate for the Appellant (s) Shri S.S.Chattopadhyay, Authorized Representative for the Respondent (s) CORAM: HON'BLE SHRI P.K.CHOUDHARY, MEMBER(JUDICIAL) FINAL ORDER NO. 75203/2020 DATE OF HEARING : 30 October 2019 DATE OF DECISION : 04 February 2020 P.K.CHOUDHARY :
The appellant, M/s.Vedanta Ltd., erstwhile M/s.Vedanta Aluminium Ltd. (SEZ Unit), has preferred the present appeal against the Order-in-Appeal No.102/ST/RKL-GST/2018 dated 29.06.2018 (referred to hereunder as 'the impugned Order') passed by the Commissioner(Appeals), GST, CX & Customs, Bhubaneswar (referred to hereunder as 'the L'd Commissioner(A)'), whereby the Appellant's claim for refund of Service Tax amounting to Rs.1,31,309/-, as disallowed by the Assistant Commissioner, Central Excise, Customs & Service Tax, Sambalpur-I Division, Sambalpur vide Order-in-Original No.R-2
Service Tax Appeal No.78799 of 2018 32/Refund/S.Tax/(32/2016)/SBP-1/2016 Dated 05.12.2016, was upheld by way of rejecting the Appellant's appeal.
2. The brief facts leading to filing of the present appeal are that during the relevant period, the Appellant was a Special Economic Zone (SEZ) Unit, duly declared by the jurisdictional Development Commissioner, in the notified SEZ area, for manufacture of Aluminium products.
3. In the course of its operation as such, the Appellant availed 'Banking and Other Financial Services' from their service provider namely M/s.ICICI Bank, Mumbai and bore the incidence of Service Tax paid thereon by the said service providers. Subsequently, on 26.12.2013, the Appellant applied for refund of the said Service Tax component amounting to Rs.1,31,903/- as was passed on to it by the aforesaid service providers during the relevant period.
4. Upon scrutiny of the appellant's said refund application, under Annexure-2, the jurisdictional Assistant Commissioner of Sambalpur-I Division issued a Show Cause Notice bearing C.No.IV(10)/42/Refund/S.Tax/VAL/SBP-I/2013/716 dated 18.03.2014 requiring the Appellant to show cause as to why the appellant's refund claim as above should not be rejected on, amongst others, the ground that they have not properly followed the provisions of the Notification No.40/2012-S.Tax dated 20.06.2012 and thereby violated the provision thereof.
5. The show cause notice was adjudicated by the jurisdictional Assistant Commissioner vide the Order-in-Original No.R- 32/Refund/S.Tax/(32/2016)SBP-I/2016 dated 05.12.2016, whereby, the Appellant's refund claim of Rs.1,31,309/- was rejected with the finding that the documents submitted by the Appellant in support of its claim was not a proper document admissible in terms of Notification No.40/2012-ST, supra.
6. Being aggrieved, the appellant challenged the said Order-in- Original dated 05.12.2016 in appeal before the learned 3 Service Tax Appeal No.78799 of 2018 Commissioner(Appeals). The impugned order was passed ex parte, whereby, the appellant's appeal was rejected. Being aggrieved, the appellant has preferred the present appeal.
7. Learned Advocate, appearing on behalf of the appellant submits that the impugned order is an exemplary case of total non-application of mind and gross abuse of power with utter disregard to the provisions of the statute and the Notification issued there-under with utmost apathy to the consequential prejudice caused to bona fide tax payers and the effect thereof on the public in general.
The Learned Advocate further submits that the findings of the learned Commissioner(Appeals) in the impugned order are verbatim reproduction in bits & pieces from the Order-in-Original, without at all considering the grounds of appeal taken by the appellant, particularly with reference to the object and intent behind granting of refund to SEZ units, which were emphatically submitted by the appellant in the Memorandum of Appeal. Thus, the impugned order lacks the fundamental characteristics of an Appellate Order and therefore deserves to be quashed in limine.
Learned Advocate further submits that the findings of the learned Commissioner(Appeals) are wholly contradictory to the letters and spirit of the benefit of exemption granted to SEZ units, by way of refund of Service Tax paid.
8. Learned Advocate further submits that the impugned order has completely ignored the binding precedents cited by the appellant in support of its claim that a substantive benefit of refund cannot be denied as long as consumption of the impugned services by the SEZ are not in dispute and that mere discrepancy in the invoices/bills/challans cannot be a reason to deny the benefit of refund. Having not considered the appellant's above submissions read with the case laws relied upon by the appellant, the impugned order suffers from the infirmity of being a non-speaking order, liable to be set aside.
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9. Learned Authorized Representative, appearing on behalf of the respondent department justifies the orders of the lower authorities.
10. Heard both sides and perused the appeal records.
11. On perusal of records, it transpires that the issue is regarding rejection of refund claim of Rs.1,31,903/- claimed by the appellant. The appellant claimed the refund of the amount as being Service Tax paid on "Banking and Other Financial Services" in respect of services received in the SEZ unit. They claimed the benefit of Notification No.40/2012-ST dated 26.06.2012. The refund was rejected by the lower authorities on two grounds ; (1) the invoices have been addressed to M/s.Vedanta Aluminium Ltd., 232, Solitaire Corporate Park Chakala Andheri (East), India, whereas the refund claim has been filed by M/s.VAL (SEZ Unit) (presently known as M/s.Vedanta Ltd.) (Burkamunda, Jharsuguda (Odisha), Pin-768201). Since the so called invoices are in the name of their Corporate Office, the legislative intent of the Notification is to extend exemption by way of refund of Service Tax paid on the specified services received for the authorzed operation in SEZ are not fulfilled., (2) They have failed to submit any copy of the invoice, bill or challan as required under Notification No.40/2012-ST dated 26.06.2012.
12. I observe that the benefit of Notification No.40/2012-ST can be availed in either way i.e. the service provider may not tax the amount or the service recipient being SEZ can claim refund.
13. It is my considered view that mere technical discrepancy in the invoices cannot be the ground for denying substantive benefit of refund available to SEZ unit. It is the policy of the Government to exempt or refund the input tax incurred by the SEZ unit. Keeping the policy of the Government in mind and specifically in the light of section 7 and section 51 of the SEZ Act, 2005, I find denial of refund claim on this ground is not sustainable. Regarding re-conciliation of Service Tax payment with evidence of challans, I find that the same was produced before the lower authority and also before me and the same is satisfactory.
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14. If the service recipient is a SEZ unit, they should pay Service Tax to the service provider and claim the refund of the amount. In the case in hand, the fact that the appellant is SEZ unit is not disputed and the receipt of the services is also not disputed as also the payment of Service Tax to the service provider. In the absence of any adverse findings on these issues, I find that the appellant herein is eligible for claiming refund of the Service Tax paid by the service provider which is in consonance with the law.
In view of the above discussions/findings, the impugned order is set aside and the appeal is allowed with consequential relief, if any, in accordance with law.
(Order pronounced in the open court on 04 February 2020.) SD/ (P.K.CHOUDHARY) MEMBER (JUDICIAL) sm