EY wins case in CESTAT on Refund denied on Services falling under approved list of Input Services [Read Order]

The Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) while granting partial relief to the EYGBS (India) LLP remanded the matter to the original authority as refund denied on Services falling under the approved list of Input Services.

The Appellant, EYGBS (India) LLP exports its substantial output services for which consideration is received in convertible foreign exchange and the said services qualify as export in terms of Rule 6A of the Service Tax Rules, 1994. Appellant also has DTA units that have no connection with the present refund claims.

During the relevant period for the provision of output services, the appellant has procured various input services which were used for authorized operations within the SEZ units on payment of appropriate service tax and making payment of value and tax to the vendors. In terms of SEZ Notification dated March 1, 2013, appellant filed three applications in Form A along with relevant documents for refund of service tax and cesses paid on input services procured in relation to authorized operations carried in the SEZ units. On scrutiny of the refund claims and documents submitted by the appellant for the disputed three quarters, three separate show-cause notices were issued to the appellant proposing to deny the refund claims, inter-alia, on the grounds viz. copy of input service invoices are not attested, refund calculation sheet along with export turnover, total turnover, DTA turnover not submitted etc. After following the due process, the original authority rejected the refund claims.

The appellant submitted that the impugned order is not sustainable in law because the same has been passed without properly appreciating the facts and documents on record and refund claims have been rejected by taking into account irrelevant consideration and materials. He further submitted that the impugned order has been passed based on assumptions, presumptions, conjectures and surmises and without considering and verifying the documents produced by the appellant before him. He further submitted that the SEZ provision was beneficial in nature and would prevail over anything which is inconsistent contained in any other legislation as provided under Section 51 of SEZ Act.

The coram of a Judicial Member, S.S.Garg held that the matter needs to be remanded to the original authority with a direction to consider the statements, invoices and documents produced by the appellant in support of his claim and thereafter decide the refund application by passing a reasoned order. The original authority will also consider that in the appellant’s own case for earlier period for the same services, the refund was granted vide Order-in-Original.

“The matter is remanded to the original authority to decide the refund claim application afresh after following the principles of natural justice,” the CESTAT ordered.

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