Case Law Details
Zydus Hospira Oncology Pvt Ltd Vs C.S.T.-Service Tax (CESTAT Ahmedabad)
Introduction: The case between Zydus Hospira Oncology Pvt Ltd and C.S.T.-Service Tax at CESTAT Ahmedabad revolves around the eligibility to claim a refund of Service Tax for services received outside Special Economic Zone (SEZ) for business activities. The case also addressed the rejection of a refund claim on specific grounds related to invoice details.
Analysis:
1. Claim for Refund: Zydus Hospira appealed for a refund under Notification No. 09/2009-ST, concerning specific input services related to SEZ operations. The services included out-of-pocket expenses, rent-a-cab service, and convention service.
2. Rejection Basis: The refund claim was initially rejected on the ground that the services were not related to authorized SEZ operations, and there was a discrepancy between item codes in the invoice and the enclosed gate pass.
3. Appellant’s Arguments: Zydus Hospira argued that the services were received for authorized operations in SEZ, and it was not practical for the service provider to reference every pre-authenticated challan in the invoices.
4. Court’s Findings: The Tribunal found that the services, although received outside the SEZ, were used for the authorized operation of SEZ. Therefore, they were eligible for a refund. However, the rejection of a specific amount of Rs. 3090/- was maintained due to a lack of explanation from the appellant regarding the discrepancy.
Conclusion: The CESTAT Ahmedabad ruling in the case of Zydus Hospira Oncology Pvt Ltd Vs C.S.T.-Service Tax sets an essential precedent concerning refunds for services related to SEZ. It clarifies that services received outside SEZ for authorized operations within the SEZ are eligible for a refund. However, it also emphasizes the importance of accurate documentation and the need to address discrepancies to ensure a successful refund claim. This judgment underscores the intricate balance between incentivizing SEZ-related operations and maintaining strict compliance with legal requirements.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The issue involved in the present case is that whether the appellant is entitled for refund claim under Notification No. 09/2009-ST dated 03.03.2009 as amended by Notification No. 15/2009-ST dated 25.05.2009 in respect of input services namely out of pocket expenses collected by the service provider, rent-a-cab service and convention service. The issue also involved is that whether the rejection of refund claim on the ground that in invoice issued by the service provider the item code does not tally with one mentioned in the enclosed gate pass is correct or otherwise.
2. Shri. Dhaval K Shah, learned Counsel appearing on behalf of the appellant submits that as regard the service such as out of pocket expenses collected by the service provider, rent-a-cab service and convention service, the learned Commissioner (Appeals) has rejected the claim on the ground that these services are not related to authorized operation in the SEZ. It is his submission that all these services were received by the unit in SEZ for authorized operation in the SEZ. It is his submission that the appellant had no activity other than operation in SEZ therefore, all the services received by the appellant are in relation to authorized operation in the SEZ. He further submits that all these services are specified in the approval list of the development Commissioner, for this reason also refund cannot be rejected.
2.1 As regard the rejection of claim on the ground that item code does not tally with the enclosed gate pass. He submits that the pre- authenticate challan is a specified requirement related to the unit located under the notified SEZ only. It is not a practice and also not practically possible for the service provider to give reference to each and every pre-authenticated challan in the invoices raised by them. He place reliance on the following judgments:-
- Zydus Hospira Oncology Pvt Ltd – 2013 (STR) 487 (Tri. Ahmd)
- Barclays Global Service Centre Pvt Ltd – 2018 (362) ELT 889 (Tri. Bom)
- Tega Industries Ltd- 2022 (67) GSTL 81 (Tri.Ahmd)
3. Shri Ajay Kumar Samota, learned Superintendent appearing on behalf of the Revenue reiterates the finding of the impugned order
4. I have carefully considered the submission made by both sides and perused the records. I find that the main issue is that whether the services of rent-a-cab service, convention service, out of pocket expenses were used for authorized operation of the SEZ of the appellant’s unit. I find that these services were received by the appellant even though outside the SEZ but these services are directly for use of the entire business activity of the appellant located in SEZ. It is not the case of the department that these services were used by any other person other than the appellant. Therefore, in my considered view all these services were indeed used for the authorized operation of SEZ hence rightly eligible for refund under Notification No. 09/2009-ST dated 03.03.2009. Accordingly, I hold that the appellant is entitled for the refund in respect of these services.
4.1 As regard the amount of Rs. 3090/- the charge of the department is that the item code between the invoice and the enclosed gate pass does tally. I find that it is finding of the Commissioner (Appeals) that the appellant have not made any explanation to this discrepancy in their appeal. Moreover, in the present appeal also I do not find any ground made on this issue therefore, in absence of any explanation by the appellant I do not incline to give any benefit on this count. Accordingly, the rejection of refund claim of Rs. 3090/- is maintained.
5. As per my above discussion and finding, the appeal is partly allowed in above terms.
(Pronounced in the open court 28.07.2023)
