Service Tax
TRT-2025-
Cestat-Ahmedabad
Date:-17-06-22
In:-
Issue Favourable to Tax Payer ?:- 0
Order Date: 17 June 2022
Facts:
- The appellant, M/s Tega Industries SEZ Ltd, Dahej (SEZ unit), which is a holding company, entered into an agreement with M/s Tega Industries Limited, Kolkata (DTA unit) for receiving Business Support Service for expanding its business outside of India.
- The said service was used for expanding the business of the appellant outside India.
- Appellant filed an application for refund in terms of Notification No. 12/13-ST dated 01.07.2013 read with Section 11B of Central Excise Act, 1944 during the period January 2017 to March 2017, which was being rejected.
- The Learned Commissioner (Appeals) has denied the refund on the ground that first the service is not included in the approved list, and secondly, the service provider and service recipient both are the same entity.
- Aggrieved, the appellant has filed an appeal.
Issue:
- Whether the appellant is entitled for refund in terms of Notification No. 12/13-ST dated 01.07.2013 read with Section 11B of Central Excise Act, 1944?
- Whether the holding company and subsidiary company will be considered as one entity?
Order:
- The Tribunal observed that the services of marketing are clearly a part of Business Support Service. Also, by relying on the case of Mast Global Business Service India Pvt Ltd v. Commissioner of Central Tax, Bangalore North -2018 (9) TMI 258 (CESTAT Bangalore) the authorities observed that merely for the reason that the service is not included in the approved list the refund cannot be denied.
- In respect to the issue of separate entity, the Tribunal observed that the appellant’s service provider is located in Kolkata which is a DTA unit and the appellant’s unit is located in SEZ. Sub Rule (7) of Rule 19 of the SEZ Rules, 2006 clearly provides that if an enterprise is operating both as DTA Unit as well as a SEZ Unit, it shall have two distinct identities with separate books of account, but it shall not be necessary for SEZ unit to be a separate legal entity.
- With this clear provision under the SEZ Rules even if the appellant is not a separate legal entity, the unit being located in SEZ shall be treated as distinct identity, therefore, the denial of refund on this ground also not tenable
- Accordingly, the appeal was allowed.
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