EXL Services SEZ BPO Solutions (P) Ltd. Vs Commissioner of Customs & Central Excise (CESTAT Allahabad)
CESTAT Allahabad held that denial of refund claim of service tax under notification no. 9/2009-ST dated 03.03.2009 as taxable service in respect of which refund is claim is not mentioned in the list of specified service approved by SEZ authority unjustified.
Facts- Appellant is operating from its units located in SEZ NOIDA and SEZ Jaipur. They are having centralized registration and are providing taxable services under the category of Business Auxiliary Service from both locations.
For providing these services to the clients of its parent companies located in the USA, appellant receives various input services.
Appellant filed an application on 23.03.2011 for refund of service tax of Rs 21,35,146/- under Notification no. 9/2009-ST dated 03.03.2009, in respect of the service tax paid on services used in authorized operations in SEZ during the period October 2010 to December 2010. After scrutiny of the refund claim it was observed that the refund claim is not admissible to the appellant
Commissioner (A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- In SE Forge Ltd. v. Commissioner of Central Excise, Coimbatore [2019 (365) E.L.T. 560 (Tri. – Chennai)], a Division Bench of the Tribunal observed that in view of the provisions of Section 26 of the SEZ Act, the notifications issued under the Finance Act cannot deprive a person from exemption of service tax. The Tribunal further held that the requirement for obtaining approval of UAC is only a procedural requirement for claiming the substantive benefit of exemption from service tax. The Department was, therefore, not justified in rejecting the claim.
In the present case revenue has not disputed the receipt of these services by the SEZ Unit, hence denial of the refund claim in respect of these three services for the reason that they did not find mention in the list of specified services approved by the SEZ authority cannot be upheld.
FULL TEXT OF THE CESTAT ALLAHABAD ORDER
This appeal is directed against Order-in-Appeal No.341/CE/APPL/NOIDA/12/1375 dated 29.10.2012 of the Commissioner (Appeal) Custom, Central Excise and Service Tax Noida. By the impugned order Commissioner (Appeal) has upheld the Order-in-Original No.R-15/Div-I/2012-13 dated 11.04.2012 vide which Assistant Commissioner Central Excise Division – I has rejected the refund claim filed by the appellant for an amount of Rs.20,08,913/-.
2.1 Appellant is operating from its units located in SEZ NOIDA and SEZ Jaipur. They are having centralized registration and are providing taxable services under the category of Business Auxiliary Service from both locations.
2.2 For providing these services to the clients of its parent companies located in the USA, appellant receives various input services.
2.3 Appellant filed an application on 23.03.2011 for refund of service tax of Rs 21,35,146/- under Notification No 9/2009-ST dated 03.03.2009, in respect of the service tax paid on services used in authorized operations in SEZ during the period October 2010 to December 2010. After scrutiny of the refund claim it was observed that the refund claim is not admissible to the appellant on following grounds:
I. The default list of services for the SEZ unit located at NOIDA for authorized operation is approved by the office of the Development Commissioner, NSEZ Noida on 25.02.2011 i.e. after the claim period. Moreover, Para II of the said letter clearly states that “no exemption/ concession can be availed of prior to date of acceptance of Bond cum LUT (Form H)
II. As per condition no (f) of Notification No 9/2009-ST dated 03.03.2009 the refund claim should be filed within six months from the date of actual payment of service tax to the service providers. Annexure I attached with the application does not show the actual date of payment of service tax to the service provider.
2.4 A show cause notice dated 27.07.2011 was issued to the appellant asking them to show cause as to why the refund claim be not rejected. After considering the submissions made by the appellant Assistant Commissioner has vide his order in original referred in para 1 held as follows:
“Order
i) I sanction the claim of service tax to the extent of Rs 1,26,233/- filed by M/s EXL Services BPO Solutions (P) Limited, Ground Floor to Third Floor, Oxygen Complex Tower B Aachivis SEZ, Plot No 7 Sector 144 Noida, on 23.03.2011 under Notification No 09/2009 – Service Tax dated 03.03.2009 accordingly, cheque no 490383 dated 11.04.2012 for Rs 1,26,233/- (Rupees One Lac Twenty Six Thousand Two Hundred and Thirty Three only) is enclosed herewith.
ii) I reject the claim of service tax to the extent of Rs 20,08,913/- filed by M/s EXL Services BPO Solutions (P) Limited, Ground Floor to Third Floor, Oxygen Complex Tower B Aachivis SEZ, Plot No 7 Sector 144 Noida, on 23.03.2011 under Notification No 09/2009 – Service Tax dated 03.03.2009 on the ground mentioned herein above.”
2.5 Aggrieved by the above order appellant preferred appeal before Commissioner (Appeal), who has by the impugned order dismissed the appeal.
2.6 Aggrieved appellant have filed this appeal.
3.1 We have heard Shri Atul Gupta and Shri Prakhar Shukla Advocates for the appellant and Shri Santosh Kumar Authorized Representative for the revenue.
3.2 Arguing for the appellant learned counsel submits that:
> The purpose of show cause notice frustrated as the refund was rejected on the ground beyond the allegations made in the show cause notice.
> The reason for denial of refund on services consumed wholly withing the SEZ is not sustainable because
