Swan Defence And Heavy Industries Limited Vs Commissioner of C.E. & S.T (CESTAT Ahmedabad)
No denial of refund based on splitting of invoices for Furniture and Building Rent if Service Tax was properly paid
Conclusion: Splitting of invoices between furniture and building rent should not lead to denial of a refund when service tax has been properly paid under the category of “Renting of Immovable Property. Artificial splitting of charges should not be a reason to reject the refund if the service was used for authorized SEZ operations and tax was correctly paid.
Held: Assessee-company was a a Special Economic Zone(SEZ) unit engaged in authorized operations from Pipavav Port, Gujarat. It had filed a refund claim under Notification No. 12/2013-ST for service tax paid on input services. Part of the refund amount was denied on the ground that the invoices were issued separately for renting of furniture and renting of the building, and that furniture did not qualify as immovable property. Assessee argued that the refund should not be denied merely because the invoice mentioned furniture separately. They pointed out that the service provider had classified the service as “Renting of Immovable Property” and paid service tax accordingly. They also explained that the renting service, including furniture, was approved by the SEZ Unit Approval Committee for use in authorized operations. Department argued that furniture did not fall under immovable property and therefore could not be covered under the Renting of Immovable Property service category. They maintained that the refund was not admissible since the service was incorrectly claimed. It was held that Renting of Immovable Property Service’ was duly approved by the Unit Approval Committee and therefore, refund of service tax could not be disallowed merely, on the ground that there are two separate invoices i.e. one for rent of the building and the other for rent of the furniture and fixtures. Tribunal held that the denial of refund on this ground was not justified and remanded the matter to the original authority for verification of tax payment and sanctioning of the refund.
