ZYDUS BSV PHARMA PVT. LTD. Vs. CST

JUDGEMENT

(1.) THIS appeal is directed against Order -in -Appeal No. 148/2011 (STC)/K. ANPAZHAKAN/COMMR(A)/AHD, dated June 29, 2011. The facts of the case, in brief, are that the appellants are having letter of approval No. KASEZ/P & C/6/06/06 -07/10839 dated January 2, 2007 of the Joint D.C., KASEZ, Ministry of Commerce, Gandhidham, duly extended up to December 31, 2011 vide KASEZ's letter dated January 21, 2011 and they had filed ST -1 on June 12, 2009 and got service tax registration from service tax Department on August 25, 2009 having registration No. AACCB7065RST001. The appellants filed a refund claim of Rs. 56,316 on July 6, 2010 in terms, of Notification No. 09/2009 -ST dated March 3, 2009 as amended vide Notification No. dated May 20, 2009. In pursuance of the said notification the appellants were asked to follow the procedure of claiming refund of service tax paid on specified services; subsequently vide Notification No. , the provisions were partially changed and the services which were wholly consumed within the SEZ were exempted from payment of service tax, thereby excluded from following the procedure of claiming of refund. It appeared that many services were consumed wholly within the special economic zone and therefore, the appellants were not entitled to the refund of service tax on such services. It was also noticed that in some cases, the services were not used in relation to authorized operations. In some cases, the claim was beyond the period of eligibility. Therefore, a show -cause notice was issued to the appellants on September 21, 2010 which was adjudicated vide the impugned order. The adjudicating authority after considering the facts of records and defence reply rejected the entire refund claim of Rs. 56,316.

(2.) AGGRIEVED by such an order, the appellant preferred an appeal before first appellate authority. The first appellate authority also concurred with the view of the adjudicating authority and upheld the order of rejection of refund claim of service tax paid on rent -a -cab services and management, maintenance and repair services on the ground that they are used in relation to the authorized activity of SEZ.

(3.) THE learned Departmental Representative, on the other hand, would submit that the service tax paid on the management, maintenance and repair services is wholly consumed in the SEZ and is not eligible for claiming as refund, as the said services would have been provided by the service provider, without charge of service tax as the appellant is in SEZ. It is his submission that since the services are wholly consumed, they are not eligible for refund of the amount of the service tax paid.