Case Law Details
Syntel Solutions (India) Pvt. Ltd. Vs Commissioner of Customs (CESTAT Mumbai)
A circular no. 83 issued by ministry of commerce; applicable to all SEZ; which covers “business support services” as authorised services as well;
The appellant is an SEZ unit. It exports information technology related services. It filed a re-fund claim of accumulated cenvat credit under Rule 5 of the Cenvat Credit Rules, 2004. It was allowed, albeit partially. Part rejection was on the ground, and upheld by the appellate authority, that the: (i) the input service invoices did not have any category of service men-tioned and (ii) the services in question were business support services not covered by the approval granted by the Development commissioner being “authorised services”. Hence, appeal.
Hon’ble CESTAT, Mumbai set aside the order and allowed the appeal. It held: (i) though the appellant has argued that section 51 of the SEZ Act, 2005 overrides any other provision and refund has to be sanctioned in terms of section 26 read with Rule 31, the said issue need not be decided; (ii) on facts; there is a circular no.83 issued by the ministry of commerce; applicable to all SEZ; which covers “business support services” as authorised services as well; (iii) hence, directs refund of the amount along with interest within 2 months.
The matter was argued by Ld. Counsel Bharat Raichandani.
FULL TEXT OF THE CESTAT MUMBAI ORDER
Partial rejection of refund claim by the Refund Sanctioning Authority to the tune of ₹4,20,215/- out of total claim of ₹40,18,518/-filed by Appellant, which is a SEZ unit provid-ing information and technology software services that qualify for export under Rule 6A of the Service Tax Rules, 1994 which had received concurrence of the Commissioner (Ap-peals), is assailed before this Tribunal.
2. We have heard on the issue from both the sides and also perused the written note of submissions alongwith relied upon case laws as well as relevant provision dealing with such refund. As could be noticed, the ultimate findings of the Commissioner (Appeals) in confirming the rejection was that the invoices, though not containing description of service, were being annexed with item wise services rendered to the Appellant against which CEN-VAT Credit was claimed were hinting at recipient of ‘Support Services of Business or Com-merce’ and not ‘Business Auxiliary Services’ which was mentioned in the approved list of services issued by the DGFT (Director General of the Foreign Trade) that was required for Au-thorised Operations of the Appellant and therefore, it was not entitled to get refund on those amounts since the same can’t be treated as input as not being in compliance with Rule, 4A of the Service Tax Rules.
3. Learned Counsel for the Appellant argued against such finding by asserting that such classification of services cannot be questioned at receivers end and refund sanctioning au-thority had no territorial jurisdiction to deal with the supplier of input services, apart from the fact that since July, 2012, upon introduction of negative list, classification of service is no more required to be placed in the duty paying documents. He further submitted that any services received by the SEZ unit is exempted in terms of Section 26 of the SEZ Act, 2005 read with Rule, 31 of the SEZ Rules, 2006 in view of overriding effect granted to such SEZ Act of 2005 by Section 51 of the said Act. However, we are not going into the legality of those aspects which are being argued, apart from the fact that Appellant has placed it on record at page 114 of the appeal memo and Instruction No. 83 issued by the Department of Com-merce, SEZ Division of the Government of India, in which uniform list of services to be fol-lowed in SEZ units are found mentioned and in the said uniform default list, which is appli-cable to all SEZ units since available as default list, under Sr. No. 64 ‘Business Support Ser-vice’ is also included approved services in the list, primarily for the purpose of availment of credit etc. We are, therefore, of the considered view that even if, the classification made by learned Commissioner (Appeals) is accepted that Appellant had received ‘Business Sup-port Service’ and not ‘Business Auxiliary Service’, it is entitled to those input credit. Hence the order.
THE ORDER
4. The appeal is allowed and the order passed by the Commissioner of Central Excise (Ap-peals-I), Pune vide Order-in-Appeal No. PUN-EXCUS-001-APP-350-16-17 dated 16.01.2017, to the extent of rejection of input credits for amount of ₹4,20,215/- is hereby set aside. Respondent-Department is directed to pay the same alongwith applicable inter-est as per law within two months of receipt of this order.
(Order pronounced in the open court on 28.02.2025)
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