Metlife Global Operations Support Center Private Limited Vs Commissioner, Service Tax (CESTAT Delhi)
The substantive benefit of service tax exemption provided under section 26 of the SEZ Act read with rule 31 of the SEZ Rules cannot be denied on procedural grounds. It is not in dispute that the appellant was not required to deposit service tax under the notification dated May 20, 2009, but service tax was deposited. It cannot be urged that the appellant is not entitled to claim refund because of a mistake in depositing service tax even if it was not required to be deposited. This issue has been examined while dealing with the applicability of the section 26(1) of the SEZ Act.
Thus, the Commissioner (Appeals) was not justified in rejecting the refund applications on this ground.
FULL TEXT OF THE CESTAT JUDGEMENT
M/s MetLife Global Operations Support Center Private Limited1 has filed this appeal for setting aside the order dated March 29, 2014 passed by the Commissioner (Appeals), Central Excise, Delhi2, by which the order dated March 28, 2013 passed by the Assistant Commissioner of Service Tax, New Delhi 3 rejecting the five refund claims filed by the appellant, has been affirmed and the appeal has been dismissed.
2. The appellant is operating as a unit of M/s Seaview Developers Ltd. in a Special Economic Zone 4. It was granted approval to operate as a SEZ unit by the office of the Development Commissioner, Noida Special Economic Zone by a letter dated June 19, 2008, subject to the provisions of The Special Economic Zones Act, 2005 and The Special Economic Zone Rules, 2006 6 made thereunder for undertaking the authorized operations ―BPO (ITES)” i.e. Business Process Outsourcing (Information Technology and Enabled Services).
3. The appellant claims that during the period March, 2009 to June, 2010 it was engaged in 100 percent export of services from its SEZ unit and that it did not have any operations in the Domestic Tariff Area. It further claims that it was involved in the provision of Business Process Outsourcing7 services and other support services to customers located outside India and that the aforesaid services were ―authorized operations” in terms of the letter dated June 19, 2008.
4. In order to advance benefit to establishments operating from SEZ, the Central Government granted service tax exemption on the taxable services provided to a Developer or a Unit to carry on the authorized operations in a SEZ. It needs to be noted that till March 2, 2009 the SEZ units were not required to pay any service tax on the input services consumed by them within SEZ in terms of a notification dated March 31, 2004 issued under section 93 of the Finance Act, 19948. However, by a notification dated March 3, 2009 such exemption was granted by way of refund of service tax. The said notification was amended by a notification dated May 20, 2009. It provided unconditional exemption from payment of service tax on all the services consumed wholly within SEZ, but on services consumed partly or wholly outside the SEZ, the exemption was granted by way of refund. In order to claim refund, it was mandatory for all the SEZ units to get the input services, for which refund was claimed and used by them for performing the authorized operations approved by the Unit Approval Committee 9 of the SEZ unit. It transpires that the appellant deposited service tax in terms of these notifications.
5. The appellant subsequently submitted five applications claiming refund of the service tax paid under the notification dated March 3, 2009 as also notification dated May 20, 2009 that amended the said notification dated March 3, 2009. The refund period, the date of application, the date of the notification and the amount involved in the five refund applications are as follows:
