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2013 (12) TMI 492 - CESTAT AHMEDABADDemand for Service Tax, interest and penalty - Units in SEZ and DTA Seperate legal entity or not - Definition of persons read with Rule 19(7) of SEZ Rules - Held that:- SEZ units do not have separate balance-sheet and audited accounts and they are considered as divisions of L & T for all statutory and other SEZ purposes - Therefore, merely the fact that invoices have been issued and agreement was entered into cannot discriminate against the appellants to take a view that SEZ units are separate entity irrespective of legal position - merely because invoices have been issued and agreement has been entered into, SEZ unit do not become separate legal entities. What is required to be done is whether in the eyes of law these units have been treated is separate entity, which is rightly submitted, has not been contradicted by the Revenue - it has not been shown as either an association of person or a body corporate, the domestic units of SEZ are separate persons either in the eyes of law or in the eyes of appellants themselves as the above discussion about issue of invoices and accounts would show. Therefore in our view in terms of definition of person, it cannot be said that the units in SEZ and DTA units can be considered as separate person. The goods as soon as they are manufactured become liable to duty irrespective of the fact whether they are sold or not. This is the reason while Central Excise statute has separate provision for remission of duty in case of goods which are destroyed in accident or fire etc. before removal and in the case of goods which become non-marketable and therefore are to be destroyed. On the other hand, service is levied on the transaction between a person and another person. In the case of service tax levy, presence of two persons is a must and these persons have necessarily to be legal persons since there is no definition of person in the Service Tax Act which would mean person has to be understood the way it is understood otherwise - Revenue has failed to show that service tax levy is attracted on the services rendered by SEZ units to DTA units of L & T unit in this case - Decided in favour of assessee.
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