Case Law Details
Question of applicability of Exemption Notification relates directly and proximately to the rate of duty, Appeal not maintainable before High Court by virtue of Section 35G(1) of Central Excise Act, 1944
Brief facts of the case
The assessee, a unit in the SEZ, was engaged in providing information technology, spot services and business process outsourcing services. For rendering these output services they receive various input services such as CHA services, management consultancy services, business support services, manpower recruitment services etc. All these services are duly approved by the Development Commissioner, SEZ, as eligible input services. In respect of these input services, the assessee claimed refund of service tax paid thereon under Notification No.9/2009-ST dated 3rd March, 2009, as amended by Notification No.15/2009-ST dated 20th May, 2009, during the period October, 2009 to February, 2011. The Department was of the view that this Notification provided for refund of service tax paid on input services except for services consumed wholly within the SEZ, when used for authorized operations in SEZ. Services wholly consumed within the SEZ are not taxable. The services consumed within the SEZ are exempt from tax. Hence, no refund can be claimed on such exempt input services under the Notifications. Therefore, the claims for refund were rejected. The matter was carried to the Tribunal and after hearing both sides, the Tribunal relied upon an order passed by it in the case of Tata Consultancy Services Limited and Wardha Power Company. According to the Tribunal in case of services which are wholly consumed within the SEZ required no discharge of the service tax liability abinitio. That, according to it, does not mean that where service tax liability has been discharged, the assessees would not be permitted to seek refund under section 11B of the Act. If the appellant is eligible for refund under section 11B then the same cannot be denied on the ground that the claim was made under Notification No.9/2009-ST. Further, Tribunal held that services provided to SEZ or units in the SEZ are deemed as export. It is the avowed policy objective of the Government of India that exports should not bear the burden of taxes. If this policy objective has to be sub-served and the objective realized, broader view of the provisions relating to refund has to be taken. Therefore, even if the appellants were not eligible for refund under Notification No.9/2009-ST, the appellants were clearly eligible for refund under section 11B of the Central Excise Act, 1944. Therefore, the rejection of service tax refund is not sustainable in law. In the present appeal, revenue questioned the order passed by the Customs, Excise and Service Tax Appellate Tribunal.
Question of Law There are two questions of law which are deemed as substantial questions of law.
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