Custom, Excise & Service Tax Tribunal
Masgmr Aerospace Engineering Co. Ltd vs Rangareddy - G S T on 15 October, 2025
(1)
ST/3291/2012
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
Division Bench - Court No. - I
Service Tax Appeal No. 3291 of 2012
(Arising out of Order-in- Appeal No.154/2012 (H-IV) S.Tax dt.27.06.2012 passed by
Principal Commissioner of Customs & Central Tax (Appeals-II), Hyderabad)
M/s MASGMR Aerospace
Engineering Co. Ltd ......Appellant
GMR HIAL Airport Office, RGIA,
Shamshabad, Hyderabad - 500 049
VERSUS
Commissioner of Central Tax
Rangareddy - GST
Posnett Bhavan, Tilak Road, Ramkoti,
......Respondent
Hyderabad, Telangana - 500 001 Appearance:-
Shri A.S. Hasija, Consultant for the Appellant. Shri B. Sangameshwar Rao, AR for the Respondent.
Coram: HON'BLE MR. A.K. JYOTISHI, MEMBER (TECHNICAL) HON'BLE MR. ANGAD PRASAD, MEMBER (JUDICIAL) FINAL ORDER No. A/30420/2025 Date of Hearing: 18.06.2025 Date of Decision: 15.10.2025 [Order per: ANGAD PRASAD] M/s MASGMR Aerospace Engineering Co Ltd (hereinafter referred to as the appellant) are in appeal against OIA dt.27.06.2012, whereby, the Commissioner (Appeals) has rejected the refund claim of Rs.1,02,92,466/- filed by the appellant (impugned order).
2. The brief facts of the case are that the appellants are Co-developers in the Special Economic Zone (SEZ) approved in terms of letter dt.20.09.2010 issued by the Department of Commerce, Ministry of Commerce & Industry for development, construction and maintenance of MRO infrastructure in their sector specific SEZ premises situated at GMR Hyderabad Aviation SEZ Ltd. The appellants are procuring services from various service providers for use in relation to authorized operations in the SEZ, which comprise of both types of services i.e., which are wholly used within the SEZ and which are (2) ST/3291/2012 either wholly or partially used outside the SEZ. They have claimed exemption under Notification No.09/2009-ST dt.30.03.2009 and accordingly, filed refund claim covering various input services for which payments were made to the service providers between September, 2010 and December, 2010. Subsequently, SCN was issued by the department proposing to reject the refund claim.
3. On adjudication, the adjudicating authority observed that certain services such as Management or Business Consultant service, Manpower Recruitment and Supply Agency, Management Consultant service and Chartered Accountant services are not eligible for refund since they are wholly consumed within the SEZ and accordingly, rejected the refund claim filed by the appellant. Against this, the appellants filed an appeal before the Commissioner (Appeals), who upheld the findings of the adjudicating authority and rejected the refund claim.
4. Learned Consultant for the appellant that the Commissioner (Appeals) has upheld the OIO which was beyond the scope of SCN rendering the impugned order unsustainable under the law. The list of approved services clearly explained the type of service approved for SEZ which fall under corresponding service under Finance Act. The adjudicating authority has failed to appreciate the difference between the two columns of the table of approved services and held them as not approved services. Accordingly, the findings in the OIO are not tenable. Reliance has been placed on the following case laws:
a) Philips India Ltd Vs CCE, Vadodara [2005 (191) ELT 1028 (Tri- Mumbai)]
b) Hospita India Ltd Vs CC [1999 (106) ELT 234]
5. He further submitted that a perusal of the nature of services covered in the refund claim would itself demonstrate that the same cannot be construed to be consumed wholly within the SEZ and the notifications does not call for production of any proof for consumption of services outside the SEZ and hence the denial of refund is not proper. It is undisputed that the services are used for authorized operations within the SEZ, which is the basic criterion for being eligible for exemption. Reliance has been placed on the following case laws:
(3)ST/3291/2012
a) Wardha Power Company Ltd Vs CCE [2012 (35) STT 499]
b) Tata Consultancy Service Ltd Vs CCE & ST, Mumbai [2012 (8) TMI 500 (Tri-Mumbai)]
6. He further submitted that the adjudicating authority as well as the Commissioner (Appeals) have taken the ground of 'Management or Business Consultant Service' not being part of Approved Services for rejecting the refund claim. The said observation was based on the mis-interpretation of the description of the services in the invoices issued by GADL and both the lower authorities have ignored the actual description of the authorized service given in the invoice. Accordingly, he prayed for allowing the appeal.
7. On the other hand, learned AR for the Revenue reiterated the findings of the lower authority as well as the Commissioner (Appeals) and has placed reliance on the judgment of Hon'ble Supreme Court in the case of CC (Imports), Mumbai Vs Dilip Kumar and Co. & Ors. [Civil Appeal No. 3327/2007 (SC)].
8. Heard both sides and perused the records.
9. We find that appellant has categorized their services as approved by Special Economic Zone and corresponding services under Finance Act, which are as under:
S.No. Type of Service Service under Finance Act, 1994 Management or Business Consultant
1. Consulting Engineering Services Service
2. Planning, Drawing & Design Service Architect Services Manpower Recruitment & Agency Manpower Recruitment and Supply
3.
Services Agency 4. Business Support Services Management Consultant Services 5. Practicing Chartered Accountant Chartered Accountant 10. The adjudicating authority has decided that Business Support
Services, Architect Service, Chartered Accountant service and Manpower Recruitment services are listed in the approved list but Consulting Engineering services, which were shown as Management or Business Consultant service are not part of the approved list, whereas, Consulting Engineering service has been accepted being included in the approved list.(4)
ST/3291/2012 Meaning thereby, services provided by the appellant are in the list which was approved by Approval Committee. In such a situation, even if the appellant tried to describe it in a different manner, he should have interpreted its correct meaning. 'Management or Business Consultant service' has been defined under section 65(65) of the Finance Act, as under:
"(65) 'Management or Business Consultant' means any person who is engaged in providing any service, either directly or indirectly, in connection with the management of any organization or business in any manner and includes any person who renders any advice, consultancy or technical assistance, in relation to financial management, human resources management, marketing management, production management, logistics management, procurement and management of information technology resources or other similar areas of management."
11. Therefore, if any person who is engaged in providing any service, in connection with the management of any organization and includes any person who renders any advice in other similar areas of management are part of that service. Thus, in these circumstances, it cannot be said that appellant had wrongly shown 'Consulting Engineering service' under 'Management or Business Consultant service'.
12. The adjudicating authority brought a new service viz., Management or Business Consultant service, which was not in the SCN, and pointed out that the said service is not approved service and thereby, the request for refund has been refused. Learned Counsel for appellant argued that the adjudicating authority has travelled beyond the scope of the SCN and that is not sustainable under law. The impugned order is based on the finding of the OIO and thereby, the impugned order is not sustainable under the law. Since no other category was suitable for the said service, the appellant had shown it under the relevant category. In such situation, the lower authority should not have refused the refund on this ground. Learned Commissioner has refused to refund that this type of activity is consumed within the SEZ and therefore, comes under wholly consumed category and therefore, not entitled for refund.
13. Learned Counsel for appellant relied on the decision of Coordinate Bench at Mumbai in the case of Tata Consultancy Service Ltd Vs CCE & ST, Mumbai (supra), wherein, on the similar issue, the opinion expressed by the Bench in this regard is quite relevant to the present appeal, which is as under:
(5)ST/3291/2012 "6.2Coming to the next question, whether in respect of the services which were wholly consumed and which were fully exempt from payment of duty, whether the appellants can be granted refund under Notification No. 09/2009-ST dated 3.3.2009 as amended by Notification No. 15/2009-ST dated 20.5.2009 through which amendment a condition was inserted stating that the refund procedure prescribed under the said Notification shall apply only in the case of services used in relation to the authorized operations in the SEZ except for services consumed wholly within the SEZ. This view of the department is also incorrect. Notification No. 09/2009-ST exempts the taxable services specified in Clause (105) of Section 65 of the Finance Act, 1994 which are provided in relation to the authorized operations in a SEZ and received by a developer or units of a SEZ, whether or not the said taxable services are provided inside the SEZ, from the whole of the service tax leviable thereon under Section 66 of the Finance Act, 1994. The refund procedure given below for operationalizing the exemption applies to services which are procured from outside in respect of which the service tax liability has to be discharged first and the refund claim subsequently. In the case of services which are wholly consumed within the SEZ, there is no necessity to discharge the service tax liability ab initio. That does not mean that in a case where service tax liability has been discharged, the appellant is not eligible or entitled for refund or the service tax paid under the provisions of Section 11B of the Central Excise Act, 1944 read with Section 83 of the Finance Act, 1994. If the appellant is eligible for refund under Section 11B, then the same cannot be denied on the ground that the claim was made under Notification No. 09/2009-ST. In this case, there is no dispute that the services were provided in relation to the authorized operations of the appellant within the SEZ. From the records it is seen that the appellant has filed the refund claim within the time period provided for in Section 11B and the appellant has borne the incidence of taxation."
14. We, therefore, find that the issues involved in this appeal are squarely covered in favour of the appellant as held in the above mentioned decision i.e., Tata Consultancy Service Ltd Vs CCE & ST, Mumbai (supra). In view of the discussion and findings, supra, we are of the definite view that the appeal is liable to be allowed.
15. Accordingly, appeal is allowed with consequential relief.
(Pronounced in the Open Court on 15.10.2025) (A.K. JYOTISHI) MEMBER (TECHNICAL) (ANGAD PRASAD) MEMBER (JUDICIAL) Veda