The Ahmedabad bench of the Customs Excise and Service Tax Appellate Tribunal ( CESTAT ) Service tax was not leviable on service received in Special Economic Zone ( SEZ ) under Section 26 of Customs Act
Mr. R R Dave, representing the appellant submitted that the appellant after filing the refund claim when they realized that they are supposed to obtain the service tax registration, they made an application and obtained registration on 14.07.2015. It is his submission that once the registration has been obtained compliance of the condition stand made therefore, the refund could not have been rejected
The assessee was required to obtain a registration before filling a refund claim in terms of Clause-III Sub-clause (c) of Notification. However, as per sub-clause (g) even if the appellant has not obtained the registration they may obtain registration before filing the refund claim. As per the facts of the present case the appellant did not obtain the registration before filing the refund application but subsequently on 14.07.2015 they had obtained registration.
The bench considered the condition of the Notification provided under clause (c) stands made and on that account refund could not have been rejected as at the time of rejection of claim the appellant had registration in possession. Therefore, considering the same refund should have been sanctioned.
The single member bench of the tribunal comprising Ramesh Nair (Judicial member) concluded that the Section 26 of SEZ Act provides that no tax/ duties are leviable on the input or input service received and used in the SEZ. As per this statutory provision which overrides any other Act, the service tax is not leviable on the service received in SEZ. Accordingly, the tax paid on the service needs to be refunded. Therefore, in my considered view the appellant is legally entitled for the refund.
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