Lanco solar Pvt. Limited Vs Commissioner, Central Tax, Central Excise, Customs (CESTAT Delhi)
Delhi CESTAT held that the ab initio exemption provided under the SEZ provisions, having overriding effect on the service tax provision. Under such position of law, a notification under service tax cannot restrict or provide a time limit for grant of refund to the SEZ unit and developer.
FULL TEXT OF THE CESTAT JUDGEMENT
The issue in these appeals is the same and they are taken up together for hearing and disposal.
2. Heard the parties.
3. The issue in these appeals is whether the appellant-assessee a developer in the SEZ, who are fully exempt from payment of service tax under Section 26 (1)(e) read with 51 of SEZ Act, 2005, and whether denial of refund of service tax on the ground of limitation is justified.
4. To grant exemption to the units and developers in the SEZ Notification No. 40/2012-ST, which have been subsequently substituted by Notification No. 12/2013-ST dated 01.07.2013. As per the notification, under Section 93(1) of Finance Act, the Central Government have granted exemption from payment of service tax leviable under Section 66B of the Finance Act on services received by a unit located in a SEZ (hereinafter either SEZ unit or Developer) and used for the authorised operation from the whole of service tax, education cess and secondary and higher education cess leviable thereof. This exemption is provided by way of refund of service tax on the specified services received by the SEZ unit or developer and used for the authorised operation. It is further provided in clause (2) of the notification, that whether the specified services are received by the unit or by developer, are used exclusively for the authorised operation, the person liable to pay service tax has the option not to pay service tax ab initio subject to the condition and procedure as prescribed. Further, provides for refund of service tax on the specified services that are not exclusively used for authorised operation or the specified services on which ab initio exemption is admissible but not claimed, shall be allowed subject to procedure and condition prescribed. Further, in clause 3(iii) provides that refund claim shall be filed within one year from the end of the month in which actual payment of service tax was made by such developer or SEZ unit to the registered service provider or such extended period as the Assistant Commissioner of Central Excise shall permit.
5. Admittedly, the appellant is a SEZ developer and they have received the specified services and paid service tax to the service provider who are registered with the Service Tax Department. Accordingly, as per the scheme under the SEZ Act and Rules read with notification hereinabove mentioned, the appellant filed periodical refund claims, which is as under:-
