Cummins Turbo Technology Vs Commissioner of Customs (CESTAT Delhi)
Background of the Appeals
CESTAT Delhi decided twelve appeals involving the same appellant, an SEZ unit under the Special Economic Zones (SEZ) Act, 2005, and the same legal issue through a common order. The appellant’s corporate office, registered as an Input Service Distributor (ISD), received input services and distributed the CENVAT credit of service tax to its domestic and SEZ units through ISD invoices. The SEZ unit claimed refunds of service tax paid on such input services under Notification No. 12/2013-ST dated 01.07.2013.
Nature of the Dispute
The first set of appeals concerned rejection of four refund claims on the ground that they had been filed beyond the one-year period prescribed in the notification. Although the notification empowered the Assistant Commissioner to condone the delay, no such condonation was granted. The second set of appeals related to denial of interest on refunds that had already been sanctioned. The third set arose because the Commissioner (Appeals), while deciding Revenue’s appeals, set aside the refund orders themselves on the ground of limitation.
Appellant’s Contentions
The appellant argued that services provided to an SEZ unit for authorised operations are exempt from service tax under Sections 26 and 51 of the SEZ Act, and therefore no service tax was legally payable. It contended that Notification No. 12/2013-ST merely provides a mechanism for obtaining refund and cannot defeat the statutory exemption. It was further submitted that refund claims involving ISD invoices could only be filed after receipt of the ISD invoices, making the prescribed limitation inapplicable in such cases. The appellant also claimed interest on refunds that had been sanctioned after delay.
