2023 (5) TMI 653 - AT - Service Tax

Demand of service tax dropped - respondent availed exemption from payment of service tax for services provided to Special Economic Zones [SEZ] but did not provide documentary certificates to support its claim of exemption - notifications dated 03.03.2009 and 01.03.2011 - HELD THAT:- The applicability of the notifications issued under section 93(1) of the Finance Act, 1994, which exempt taxable services provided in relation to the authorized operations in SEZ, has been considered by the Tribunal in M/S. SRF LIMITED VERSUS COMMISSIONER OF CUSTOMS, CENTRAL EXCISE & SERVICE TAX, LTU NEW DELHI AND COMMISSIONER OF CGST, AND CENTRAL EXCISE, INDORE [2022 (4) TMI 989 - CESTAT NEW DELHI] wherein after analyzing the provisions of the Special Economic Zones Act, 2005, the provisions of notifications issued under the provisions of section 93(1) of the Finance Act and the decision of the Telangana High Court in GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT], the Tribunal observed that as the charge of service tax under the Finance Act, 1994 on the services provided for authorised operations of the appellant are overridden by section 51 of the SEZ Act, 2005, any exemption notifications for such services as well as the conditions laid down in them are redundant. Service tax, if any, paid on such input services for authorised operations need to be refunded to the appellant. We also find no force in the other grounds raised for denying the refund of service tax paid.

Revenue however, submitted that in view of the provisions of section 26(2) of the SEZ Act, the exemption could have been claimed by the appellant only in accordance with the provisions of section 93(1) of the Finance Act - this submission has been dealt with by the Tribunal in SRF Ltd. and it has held that the exemption notification should have been issued under section 26(2) of the SEZ Act and the notifications issued under the Finance Act, in view of the provisions of SEZ Act, would have no application.

The appeal filed by the department deserves to be dismissed and is dismissed.