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2015 (12) TMI 1273 - AT - Service TaxDemand of service tax - Rent a cab Service - pick-up and dropping of the employees in the SEZ - Whether, this will result in service provided to SEZ hence not eligible to service tax - Held that - Pick-up and dropping may be due to discharge of contractual obligation as part of remuneration package of employee. But that does not appear to have no relevance in the course of the integral connection to the SEZ. Secondly, the letter of Commerce Department is issued on 19.11.2013 bringing Rent-a-Cab service to the fold of exclusion. Rent-a-Cab service is expected to terminate in the SEZ to fall with the scope of exclusion. Appellants case does not appeal to be appreciated at this stage that above service fall in the exclusion category and that too when exclusion was permitted by Ministry beyond the date of adjudication period. Thirdly, it also does not appear to commonsense that the services has any integral connection to appreciate as input service. - Assessee directed to make pre deposit - Decided against assessee.
Issues:
1. Whether pick-up and dropping of employees in the SEZ amount to a service provided to the SEZ? 2. Whether service tax is realizable from the appellant for the services provided? 3. Whether the services provided by the appellant fall under the exclusion category as approved service? 4. Whether the appellant is entitled to a waiver of pre-deposit? Analysis: 1. The appellant argued that pick-up and dropping of employees in the SEZ should be considered as a service provided to the SEZ, thus exempting them from service tax liability. However, the Revenue contended that services provided outside the SEZ are not relevant in claiming that services have been provided to the SEZ. The Adjudicating authority upheld the liability, stating that the services were not integral to the SEZ. 2. After hearing both sides and examining the records, the Tribunal found that while pick-up and dropping may be part of the employee's remuneration package, it lacks an integral connection to the SEZ. Additionally, a letter from the Commerce Department dated 19.11.2013 excluded Rent-a-Cab services from taxation, but the appellant's case did not convincingly fall under this exclusion, especially considering the timing of the Ministry's decision. 3. The Tribunal referenced previous decisions and emphasized the importance of maintaining a balance between the contentions of both parties and protecting the interests of Revenue. As an interim measure, the Tribunal directed the appellant to deposit a sum of &8377; 10,00,000 within eight weeks to ensure compliance and report back by 24th December, 2015. This decision aimed to address the complexities of the case while safeguarding the revenue interests. This detailed analysis of the judgment highlights the key arguments presented by both parties, the Tribunal's reasoning, and the interim measures taken to address the issues raised in the case.
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