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2015 (7) TMI 823 - HC - Service TaxBenefit of ab initio exemption - SEZ units were exempted from payment of service tax utilized for the authorized operations of the SEZ units - Notification No.12 of 2013 - Held that:- Respondent No.2 was not justified in refusing authorization to the petitioner, in Form A2 for availing ab initio exemption from payment of service tax. On a perusal of the notifications, it is clear that the petitioner had an option to either pay the service tax in advance or not to pay the same, subject to the conditions provided in the notifications. For seeking ab initio exemption, the petitioner unit was required to secure the approval of the list of services, as are required for the authorized operations of the unit on which the unit desires to claim exemption from service tax from the 'Approval Committee'. Admittedly, the petitioner unit also furnished a declaration, in Form A1 verified by the Specified Officer of the SEZ along with the list of specified services. Once, the SEZ unit secures the approval of the 'Approval Committee' to the list of the services on which the SEZ unit wishes to claim exemption from service tax and furnishes a declaration, in Form A1 verified by the Specified Officer of the SEZ, it is rightly submitted on behalf of the petitioner that the respondent No.2 or for that matter, any Jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise is enjoined with a duty to issue the authorization, in Form A2. It is clear from Notification No.12 of 2013, under which the petitioner unit has exercised an option not to pay the service tax ab initio, that the respondent No.2 was obliged to issue the authorization, in Form A2 to the petitioner unit in the circumstances of the case. Mere issuance of Form A2 by the respondent No.2 would not absolve the petitioner unit of its liability to pay the service tax and cesses along with interest on delayed payment, if it is subsequently found that the petitioner unit has not used the services exclusively for the authorized operations as per the undertaking, in Form A1. In terms of Notification No.12 of 2013, the petitioner unit is enjoined with a duty to submit to the Superintendent of Central Excise, a quarterly statement, in Form A3, furnishing the details of specified services received by it without payment of service tax. If that is so, the respondent No.2 could not have refused the authorization to the petitioner unit in Form A2 on the ground that some of the claims made by the petitioner for refund had been rejected in the past. Ample safeguards are provided by Notification No.12 of 2013 for recovery of sales tax and cesses along with interest on delayed payment if it is found that the specified services on which the exemption has been claimed, have not been used exclusively for authorized operations. On a perusal of the documents annexed to the petition and the communications exchanged between the parties that the respondent No.2 has illegally denied the benefit of Notification No.12 of 2013 to the petitioner unit. - Impugned order is set aside - Decided in favour of assessee.
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