ATC Tires Private Limited Vs Commissioner of GST and Central Excise (CESTAT Chennai)
The appellant, an SEZ unit engaged in the manufacture of excisable goods under Chapter 40 of the Central Excise Tariff Act, 1985, filed a refund claim of Rs.1,27,93,547 under Notification No.17/2011-Service Tax dated 01.03.2011. The adjudicating authority sanctioned Rs.1,03,43,994 and rejected the balance. On appeal, the Commissioner (Appeals) granted further relief but sustained rejection of Rs.14,69,387. Before the Tribunal, the appellant challenged this rejection, though its grounds of appeal specifically sought relief in respect of Rs.13,37,485 relating to the periods April–June 2015 and July–September 2015.
The dispute concerned refund of service tax paid on various specified services including construction of the factory building, insurance brokerage, architectural services, payroll processing, statutory compliance services, testing and inspection of coal, legal consultancy, recruitment services, insurance, software development, electricity brokerage, professional services, and telephone services. The appellant maintained that these services had been approved by the SEZ Approval Committee, were used for authorised operations, and the applicable service tax had been paid.
The Revenue’s case, as reflected in the orders of the lower authorities, was that the disputed services were not “wholly consumed” within the SEZ and certain services were stated to have no connection with manufacturing activity. The Commissioner (Appeals) rejected refund primarily on this basis. The Tribunal noted, however, that the appellate order did not record any finding that the services were unrelated to the identified authorised operations of the SEZ.
