2023 (2) TMI 289 - AT - Service Tax

Demand of service tax for the service provided to SEZ for the service wholly consumed within their SEZ - Eligibility for exemption under notification no.9/2009-ST as amended by notification no.15/2009-ST dated 20.05.2009 - erection commissioning and installation service - notification no.4/2004-ST was superseded vide notification no.9/2009-ST dated 03.03.2009 whereby, the exemption was granted by way of refund after payment of service tax in relation to specified services - effect of such amendment, retrospective or prospective? - HELD THAT:- The appellant have provided the services to SEZ during the period 03.03.2009 to 20.05.2009, during the said period the exemption to service provided to SEZ was available under notification no. 9/2009-ST which was by way of refund however, subsequently notification no.15/2009-ST dated 20.05.2009 was issued amending the notification no.9/2009-ST wherin, sub-para (c) of para 1 of the notification no.9/2009-ST was substituted.

The amendment is explicitly by way of substitution of sub-para (c) in the notification no.9/2009-ST. It is settled law that if any amendment is brought whereby, the earlier terms of the notification is substituted then, such amendment shall be effective from retrospective effect i.e. from the date of original notification accordingly, for the services provided during the period 03.03.2009 to 20.05.2009 substituted sub-para (c) shall apply. As per the sub-para (c) of notification no. 15/2009-ST., if the service provided is for use in authorized operations in the SEZ shall be exempted without opting for the refund by the service provider subject to the condition the services are consumed wholly within the SEZ - In the present case, the service of erection, commissioning and installation is indeed used and wholly consumed in the SEZ therefore, the appellant is eligible for exemption under notification no.9/2009-ST as amended by notification no.15/2009-ST dated 20.05.2009.

The demand of service tax in respect of services provided to authorized operation of SEZ is not sustainable accordingly, the impugned order is set aside - Appeal allowed.