Home Case Index All Cases Service Tax Service Tax + AT Service Tax - 2023 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2023 (8) TMI 659 - AT - Service TaxDenial of ab initio exemption from Service Tax - SEZ unit - works contract services - security services - rent-a-cab services - N/N. 12/2013-ST dated 01.07.2013 - interest and penalty - HELD THAT:- It is clear from Section 26(1)(e) that the exemption is available to carry on authorized operations in a Special Economic Zone. Clause (2) of the Notification ibid. states that the exemption shall be provided by way of refund of Service Tax paid on the specified services received by the SEZ unit or developer and used for the authorized operations. It is clear from the above Section as well as Notification that there is no specific mention that the services are to be consumed in a SEZ to avail the benefit of Notification No. 12/2013 ibid. - the impugned order that the Ld. Commissioner (Appeals) has given his findings on the ground that the services were found to be not eligible for availing this exemption as they were received / carried out outside the SEZ zone. He has not found that the services were not used for authorized operations. Revenue has also not filed any appeal against the impugned order. The Hon’ble Telangana High Court in the case of GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT], while examining Notifications issued under Section 93 of the Finance Act, 1994 and the benefit of exemption flowing therefrom, has held Section 26(1) is a special power of exemption under a special enactment dealing with a unit in a special economic zone. Therefore, the notifications issued under Section 93 of the Finance Act, 1994 cannot be pressed into service for finding out whether a unit in a SEZ qualifies for exemption or not. The location of the SEZ unit of the appellant is in a remote area, due to which they had to employ migrant labourers who did not have accommodation to stay during the period of their employment with the appellant. For this reason, the appellant provided place of stay for such labourers and there is no dispute that such labourers were working with the SEZ unit of the appellant. Therefore, the appellant had to construct dormitory where such workers / employees could be accommodated - CSR activities are intricately linked with the appellant’s business and hence, must be regarded as contributing for carrying out authorized operations in the SEZ and consequently, the same are also covered under Section 26(1)(e) of the SEZ Act. There is no requirement that the impugned services should be consumed in the SEZ alone, so long as the services are being used for authorized operations and therefore, the demand raised and confirmed cannot sustain - not only for the reason that the Notification in question has been misinterpreted, but also for the reason that the Order-in-Original has clearly traversed beyond the Show Cause Notice which was also upheld vide impugned Order-in-Appeal. The impugned order is set aside and the appeal is allowed.
|