CESTAT Finds SEZ Service Tax Refund Rejection of Piramal Enterprises Unjustified, Orders Fresh Adjudication
CESTAT observed that the Commissioner (Appeals) had not considered this crucial information while rejecting the refund claim
The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the rejection of a service tax refund claim by Piramal Enterprises Pvt. Limited was unjustified and has ordered a fresh adjudication of the matter. The company operates both in the SEZ and Domestic Tariff Area (DTA). The case revolves around a refund claim of Rs. 3,02,945 filed...
The Ahmedabad bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the rejection of a service tax refund claim by Piramal Enterprises Pvt. Limited was unjustified and has ordered a fresh adjudication of the matter.
The company operates both in the SEZ and Domestic Tariff Area (DTA).
The case revolves around a refund claim of Rs. 3,02,945 filed by Piramal Enterprises under Notification No. 12/2013-ST dated 01.07.2013 for service tax paid on services utilized in the Special Economic Zone (SEZ) area.
SEZ & EOU Uncovered – Are You Making the Most of These Tax Benefits?
The company’s refund claim was rejected by the Assistant Commissioner on the grounds that it failed to provide sufficient documentary evidence, such as invoices, sales ledgers, and sales registers, to prove that the services were exclusively used for authorized SEZ operations.
Although the company appealed before the Commissioner (Appeals), there were no favorable results.
CESTAT found that the jurisdictional range Superintendent had verified that the majority of the services were used for SEZ operations, as evidenced by the ST-3 returns filed by Piramal Enterprises for the year 2013-14. The returns showed that clearances against exports amounted to Rs. 30,21,15,806, while DTA clearances were only Rs. 1,95,84,432. The superintendent also noted that telecommunication services were used for both SEZ and DTA units and recommended that the refund be allowed as per the provisions of Notification No. 12/2013-ST.
Complete Ready to Use PDFs of 200+ Agreements Click here
CESTAT observed that the Commissioner (Appeals) had not considered this crucial information while rejecting the refund claim. The tribunal found no logical basis for the rejection, especially since the range Superintendent's report indicated that the majority of the services were used for SEZ operations.
CESTAT noted that “ I do not find any logic in the findings of the learned Commissioner (Appeals) is rejecting the refund of service tax paid on serives 3 Appeal No. 12141 of 2016-SM rendered/used in the specified SEZ area. Since the facts of the matter as claimed by the appellant at the time of hearing as well as the report submitted by concerned range Superintendent indicate that majority of value of the services was used for SEZ operations and a smaller amount of Rs. 1.95 Crores was used for DTA unit.
SEZ & EOU Uncovered – Are You Making the Most of These Tax Benefits?
The CESTAT remanded the matter back to the original adjudicating authority for fresh consideration. The authority was directed to review the ST-3 returns and other relevant records to determine the exact value of services used in the SEZ area and decide the refund claim accordingly.
The CESTAT, comprising C. L. Mahar (technical member), allowed the appeal by way of remand.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
