By TIOL News Service

MUMBAI, JAN 05, 2018: A refund application filed in terms of notification 17/2011-ST in respect of Banking and Financial services, business auxiliary services, electricity exchange service, general insurance service, service provided by share transfer agent, courier services, CHA services, GTA, Information and Software services, Legal Consultancy services, management, maintenance or repair service, rent-a-cab service, technical inspection and certification service, telecommunication service, service provided by restaurant & cargo handling service consumed in the SEZ was denied by the Revenue by simply stating that there was no nexus between the services and the operation carried out in the SEZ; that it was beyond imagination that some of the services were provided in the SEZ.

Incidentally, in respect of the services of stock broker, port, share transfer agent, stock exchange service, approval was granted by the Development Commissioner subsequently and which is not questioned by Revenue. The appellant submits that all these services are integrally connected with SEZ operations and, therefore, the certificate shall have retrospective application.

The AR justified the order.

After hearing both sides and perusing the records minutely, the Bench observed -

++ In absence of proper enquiry being conducted to bring out that the service was not utilized or the evidence adduced was insufficient…, it is not possible to be appreciated that the appellant was disentitled to the benefit of refund. …, disallowances were made on suspicion holding that it was beyond imagination that the service has been provided in the SEZ. We may make it clear that the suspicion, however, great may be is not substitute of proof and Revenue did not discharge burden of proof bringing out a case to substantiate allegation of non-utilisation of service in question in the SEZ. Therefore, on all these counts, there shall not be any disallowance of refund.

++ In respect of services other than above counts, the flimsy plea of Revenue is that the invoices were in the name of head office and tours were not verifiable as well as certain invoices were not relatable do not base on any enquiry result for which allegation of Revenue without discharging its burden of proof fails to stand. Further, stand of Revenue does not seem to be substantiated without any cogent or credible evidence brought to record.

The appeals were allowed but while parting the CESTAT requested the Chief Commissioner to properly guide the field so that exercise of adjudication does not become futile and spurious show cause notices are not issued to prevent waste of public time and resources.

(See 2018-TIOL-80-CESTAT-MUM )