Appeal No.,ST/20757/2019,ST/20776/2019
Period of Dispute,April 2016 to June 2016,April 2017 to June 2017
Amount of Refund rejected,"Rs. 14,33,825/- towards Health
Insurance Services","Rs. 29,02,376/- towards Health
Insurance Services. Rs. 2,070/-
towards Meal Passes
Refund claimed,"Service Tax of Rs. 43,04,840/-
paid on specified services
received and used for authorized
operations of the SEZ Unit","Service Tax of Rs. 47,68,507/-
paid on specified services
received and used for authorized
operations of the SEZ Unit
Order-in-Original No. &
Date",11/2018 dated 09/02/2018,12/2018 dated 09/02/2018
Order-in-Appeal No. & Date,30/2019 CT dated 29/04/2019,31/2019 CT dated 29/04/2019
Amount rejected by OIA,"Rs. 14,33,825/- towards Health
Insurance Services","Rs. 29,02,376/- towards Health
Insurance Services and Rs.
2,070/- towards Meal Passes
upon the following decisions: Â,,
· Lowes Services India Pvt. Ltd. V. Commissioner of Service Tax, Bangalore â€" 2019 (1) TMI 116-CESTAT Bangalore Â",,
· Mast Global Business Services India Pvt. Ltd. V. CCT, Pune â€"2018-VIL-601-CESTAT-BLR-ST",,
5.2. The learned counsel thereafter referred to Notification No. 12/2013-ST dated 01/07/2013 which provides exemption by way of refund of service,,
tax paid on “specified services†received by the SEZ Unit and used for the authorized operations and submitted that the said Notification provides,,
that if the “specified services†are used exclusively towards authorized operations, the person liable to pay service tax has the option not to pay",,
the service tax ab initio subject to certain conditions or claim refund of service tax paid. He further submitted that General Insurance Business,,
Services received by them have been undisputedly used for authorized operation and therefore, it is a ‘specified service’ as defined under the",,
Notification No. 12/2013- ST dated 01/07/2013 as amended. He also submitted that the said Notification refers to “specified services†and not,,
“input services†and the said two terms should be distinguished as per the provisions under the said Notification. He also submitted that the,,
impugned order has erred in applying the requirement of the definition of “input services†under the Cenvat Credit Rules, 2004 to “specified",,
service†as provided under Notification 12/2013-ST dated 01/07/2013. He also submitted that as per Section 26(1) (e) of the Special Economic Zones,,
Act, 2005 read with Rule 31 of the Special Economic Zones Rules, 2006 prescribed for exemption from payment of service tax on services received",,
by the SEZ unit or developer. Further Section 51 of the SEZ Act provides for overriding effect of the SEZ Act over other laws in force. He also,,
submitted that the Notification issued under the Finance Act, 1994 cannot curtail the benefits provided under Section 26 of the SEZ Act. In this regard,",,
he relied upon the following decisions: Â,,
· GMR Aerospace Engineering Ltd. V. Union of India â€" 2019 (31) G.S.T.L. 596 (A.P.) Â,,
· Cybercom Datamatics Information Solutions V. Commissioner of Service Tax, Mumbai-V â€" 2017-VIL-1055- CESTAT-MUM-ST Â",,
· Cummins Technologies India v. CCE & ST, Meerut-II â€" 2018-VIL-351-CESTAT-DEL-ST Â",,
· Mahindra Engineering Service Ltd. V. Commissioner of Central Excise, Pune-I â€" 2014-VIL-486-CESTAT-MUM-ST",,
5.3. He further submitted that the impugned order passed by the learned Commissioner (Appeals) is beyond the allegation levelled in the show-cause,,
notice and hence cannot be sustained. For this purpose, he relied upon the decision in the matter of Commissioner of Customs, Mumbai V. Toyo",,
Engineering India Ltd. reported in 2006 (201) E.L.T. 513 (S.C) wherein it has been held that the authorities under Act cannot travel beyond the show-,,
cause notice. Learned counsel for the appellant did not press for refund of service tax on Meal Passes being the small amount of Rs. 2,070/- (Rupees",,
Two Thousand and Seventy only).,,
6. On the other hand, the learned AR reiterated the findings of the impugned order.",,
7. After considering the submissions of both the parties and on perusal of the material on record, I find that the Commissioner (Appeals) in the",,
impugned order has confirmed the rejection of refund claim pertaining to insurance services on the ground that the same is not covered under the,,
“input service†definition under Rule 2(l) of Cenvat Credit Rules, 2004 which was not proposed/raised in the show-cause notice and hence beyond",,
the scope of show-cause notice. The Hon’ble Apex Court in the case of Toyo Engineering India Ltd. cited supra and also in the case of,,
Commissioner of Central Excise V. Gas Authority of India Ltd. â€" 2008 (232) E.L.T. 7 (S.C) has held that the authorities under Act cannot travel,,
beyond the show-cause notice. Further I find that in the show-cause notice as well as in Order-in-Original, the refund has been rejected only on the",,
ground that the said insurance services have not been approved by the Approval Committee of the SEZ and hence the appellants are not entitled to,,
the refund. Further I find that the Commissioner (Appeals) in the impugned order has accepted the fact that approval is merely a procedural formality,,
and by relying upon the decision of the Tribunal in the appellant’s own case cited supra, he has allowed the refund but further proceeded to reject",,
the refund by resorting to exclusion Clause (C) in the definition of “input service†as provided in Rule 2(l) of Cenvat Credit Rules, 2004. Hence, I",,
find that both the impugned orders are not sustainable on this ground alone. Besides this, I find that even on merit the said services fall in the definition",,
of ‘insurance service’ and has also been approved by the Unit Approval Committee read with Ministry of Commerce & Industry letter dated,,
16/09/2013 and subsequent letters dated 19/11/2013, 19/06/2014, 09/07/2014 which includes “General Insurance Business Services†at Sl. No. 26.",,
Further, I find that the General Insurance Business Services also form part of the default list of services specified by the Karnataka Special Economic",,
Zone vide Circular No. 2/2014 dated 25/07/2014. Further I find that this Tribunal in the case of Barclays Global Service Centre Pvt. Ltd. cited by the,,
appellant it has been held that Medical Insurance and Personal Accident Insurance are covered under the General Insurance Business. I also find that,,
it has been consistently held by the Tribunal in the appellant’s own case as well as in other cases that mere non-inclusion of services in the list of,,
Unit Approval Committee shall not be a ground for rejection of refund claim. It has also been held in the decision cited supra that the provisions of,,
Special Economic Zones Act, 2005 has an overriding effect over other laws in force. In view of my discussion above and by following the ratios of the",,
various decisions cited supra, I am of the considered view that the impugned orders are not sustainable in law and therefore I set aside the same by",,
allowing both the appeals of the appellant.,,
(Order was pronounced in Open Court on 05/03/2021),,
