Dr Reddys Laboratories Ltd. Vs Commissioner of Central Tax (CESTAT Hyderabad)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Hyderabad allowed the appeal filed by Dr. Reddy’s Laboratories Ltd. and set aside the order rejecting refund claims aggregating to ₹33,98,948 under Notification No. 12/2013-ST in respect of taxable services received for authorised operations in its Special Economic Zone (SEZ) unit.
The appellant had established an SEZ unit at Srikakulam for manufacturing pharmaceuticals and active pharmaceutical ingredients. During the period from January 2015 to November 2015, it received various taxable services, including Customs House Agent (CHA) services, Rent-a-cab services, Transport services and Works Contract services for authorised operations. Service tax was paid either by the service providers or by the appellant under the Reverse Charge Mechanism (RCM). The appellant filed a refund claim of ₹34,70,994, of which a substantial portion was rejected on grounds such as invoice mismatches, non-submission of original invoices, incomplete addresses in invoices and non-inclusion of certain services in the approved list. The Commissioner (Appeals) upheld the rejection.
Before the Tribunal, the appellant contended that the refund had been denied despite there being no dispute regarding receipt of services, payment of service tax or utilisation of the services for authorised operations. It submitted that documentary evidence had been produced to establish payment of service tax on CHA services, tax paid under RCM for transport and Rent-a-cab services, and use of Works Contract services for construction of infrastructure necessary for the SEZ unit. It also relied on Section 51 of the SEZ Act, 2005, which gives overriding effect to the provisions of the SEZ Act.
