CESTAT, NEW DELHI BENCH
Mahindra World City (Jaipur) Ltd.
Commissioner of Central Excise, Jaipur
FINAL ORDER No. 496 OF 2012-SM(BR)
APPEAL NO. ST/845 OF 2011
APRIL 4, 2012
1. The appellants have provided various services to an Special Economic Zone (SEZ). They have also been providing output service in relation to units outside the SEZ i.e. in normal Domestic Tariff Area (DTA). They took cenvat credit on various input services like telecommunication services, cab services, courier service, chartered accountant’s service etc. They filed a refund claim in terms of Notification No. 9/09-ST as amended which provides exemption for input services used for providing services to SEZ and units located in SEZ. The claim filed by the appellant has been allowed to certain extent by the adjudicating authority but was disallowed to the extent of Rs. 1,69,576/-. On appeal filed with Commissioner (Appeals), he allowed a further amount of Rs. 43,656/- but rejected refund claim to the extent of Rs. 1,25,920/-.
2. Aggrieved by the order of Commissioner (Appeals), appellants have filed appeal. They are praying for refund of Rs. 1,69,576/-. In view of the decision of Commissioner (Appeals), the dispute presently is in respect of Rs. 1,25,920/-.
3. The crux of the dispute is what should be the basis for apportioning the value of input services that are relatable to SEZ and the value of services relatable to service rendered in area outside SEZ. The impugned orders worked out such apportionment on the basis of area developed under the two categories. The appellant is raising disputes about the calculations for determining these two areas. Further the appellant submit that a basis of ratio of value of output service rendered inside SEZ and that outside SEZ will be a much better and clearly determinable ratio than that based on area developed.
4. The learned AR submits that the lower authority has determined the refund on the basis of areas inside SEZ and outside SEZ. He says that in the Tribunal, it is not possible to check the accuracy of such calculation. He also submits that the basis of value realized is a new basis now being canvassed.
5. I have considered arguments on both sides. The ratio based on areas developed in SEZ and outside SEZ is not a good criterion for the purpose in question for various reasons. In the first place, Revenue will not be able to do verification of the measurements considering the activity involved vis-a-vis amount of refund to be granted. Further the quality of development and facilities provided inside SEZ and outside SEZ are likely to be very different. The period during which such activity was carried out also is not easily determinable. On the other hand, ratio of value of services realized for output services rendered in areas inside SEZ and outside SEZ is easily determinable and does not involve the defects pointed out above for the ratio of areas. So I order that the refund may be granted adopting the ratio of value of services rendered.
6. The appellants submit that they are able to give data of value of services rendered inside SEZ and outside SEZ and if such basis is adopted for grant of refund, it will be more favourable to them.
7. It is made clear that if the refund to be granted works out to be more than the amount originally claimed, the refund will be restricted to the amount originally claimed in this case.
8. The appeal is allowed in the above terms for re-quantification of refund to be granted.