Reliance Industries Ltd. Vs Commissioner of Central Excise (CESTAT Mumbai)
The appeal challenged an order of the Commissioner (Appeals), Mumbai Zone I, which upheld rejection of the appellant’s claim for refund of service tax paid on banking and other financial services provided by NSDL. The appellant, a developer that had established a unit in a Special Economic Zone (SEZ) at Jamnagar, sought refund of Rs. 12,32,233 under Section 26 of the Special Economic Zones Act, 2005, contending that, as an SEZ developer, it was not liable to bear service tax on services received for authorised operations.
The lower authorities rejected the refund on the ground that the services related to an Initial Public Offering (IPO), the invoices were raised on the appellant’s corporate office in Mumbai rather than the SEZ unit, and the services were not consumed within the SEZ. The Commissioner (Appeals) also held that raising finance from outside sources did not constitute authorised operations and that Notification No. 9/2009-ST, which provided a refund mechanism, was prospective and therefore inapplicable.
The appellant contended that the refund was based on Section 26 of the Special Economic Zones Act, 2005, which had a wider scope than Notification No. 4/2004-ST, and that the IPO was undertaken solely to raise funds for establishing and operationalising its SEZ undertaking. It also argued that it had borne the incidence of service tax and was therefore entitled to claim the refund. There was no dispute that the appellant operated in a notified SEZ, that the SEZ unit was its sole undertaking, and that the IPO was intended for operationalising that undertaking.
