Service Received Outside SEZ for Business Activities are Eligible to Claim Refund of Service Tax under Notification: CESTAT [Read Order]

The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the service received outside Special Economic Zone (SEZ) for business activities is eligible to claim a refund of service tax under the notification. The Court allowed the claim of refund claimed by the assessee. 

Zydus Hospira Oncology Pvt Ltd, the appellant assessee was engaged in input services namely out-of-pocket expenses collected by the service provider, rent-a-cab service, and convention service, and the assessee claimed refund in respect of these services, but the Commissioner (Appeals) rejected the claim. 

Dhaval Shah, the counsel for the assessee contended that as regard the service such as out-of-pocket expenses collected by the service provider, rent-a-cab service, and convention service were received by the unit in SEZ for authorized operation in the SEZ and the assessee had no activity other than operation in Special Economic Zone. 

Further submitted that all these services are specified in the approval list of the Development Commissioner, for this reason also refund cannot be rejected and the assessee received all the services for the business activities which were outside the Special Economic Zone. 

Ajay Kumar Samota, the counsel for the department relied on the decisions made by the lower authorities and contended that the rejection of the refund claim was made as per the law and liable to be sustained. 

Also stated that the rejection of the refund claim on the ground that in the invoice issued by the service provider, the item code does not tally with the one mentioned in the enclosed gate pass was correct or otherwise. 

The Bench observed that even though outside the SEZ but these services are directly for use of the entire business activity of the located in SEZ and all these services were indeed used for the authorized operation of SEZ and hence rightly eligible for a refund under Notification. 

A single-member bench comprising Ramesh Nair (Judicial) allowed the refund claim claimed by the assessee and held that the assessee was entitled to the refund in respect of all the services received by the assessee. 

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates