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2022 (9) TMI 166 - Service Tax
Recovery of service tax alongwith interest and penalty - services rendered to units in special economic zones (SEZ) - rendering of taxable service or not - adjudication order had failed to appreciate that the services rendered by them to M/s Credit Suisse Services (India) Pvt Ltd was not taxable owing to the privileges conferred upon the recipient by Special Economic Zones Act, 2005 - period from 1st March 2011 to 14th June 2011 - HELD THAT:- The issue stands settled by the decision of the Hon’ble High Court of Telengana and Andhra Pradesh in GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT] where it was held that the SEZ Act 2005 defines the word “prescribe” under Section 2(w) to mean the rules framed by the Central Government under the SEZ Act, 2005. The space is also not left unoccupied, as the Central Government has issued a set of Rules known as “the Special Economic Zones Rules, 2006”, wherein the Central Government has prescribed the terms and conditions for grant of exemptions under Rule 22. Therefore, there is no question of comparing the terms and conditions prescribed in Rule 22 with the terms and conditions prescribed in the notifications issued under any one of five enactments listed in Section 26(1) to find out whether there was any inconsistency.
It is on record that the required documentation was not available for the entire period of the dispute but, at the same time, it cannot be denied that at some point, the eligibility did exist. The procedural infirmities, for a shorter or longer time, does not in any way supplant the exemption accorded to the impugned supply of services - Furthermore, the findings of the adjudicating authority do not arrive at a conclusion that, but for the said procedural infirmities, the eligibility of the appellant to render such services without payment of tax was in question.
The demand for allegedly rendering of services within India does not sustain.
Appeal allowed - decided in favor of appellant.