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2023 (10) TMI 664 - AT - Service TaxInterpretation of statute - incorrect interpretation of section 26(2) and section 58 of Special Economic Zones Act, 2005 - error apparent from the face of record or not - Recovery of Service tax alongwith penalty - Non-consideration by the Tribunal of section 26(2) and section 58 of Special Economic Zones Act, 2005 - HELD THAT:- The exemption from service tax is, unlike goods, not related to place where the service is physically rendered but to the extent of deployment in pursuit of carrying out ‘authorized operations’ and, that too, in accordance with the Special Economic Zones Rules, 2006. ‘Authorized operations’ is defined in section 2(c) of Special Economic Zones Act, 2005 and any demand made under section 73 of Finance Act, 1994 without ascertainment of usage for ‘authorized operations’, thus defined, lacks authority of law. It has never been the case of Revenue that such exercise had been carried out by the adjudicating authority and found wanting. It is, thus, all too clear that the present application has been made without comprehending of the scope of section 26(2) of Special Economic Zones Act, 2005. There can be no claim that Finance Act, 1994 relates to Special Economic Zone in any manner as there is no reference therein to such expression and a notification, under section 93 of Finance Act, 1994 enabling exemptions generally or to a class of service-providers, can have no pretence to being saved by section 58 of Special Economic Zones Act, 2005. Moreover, such saving is founded on lack of inconsistency in the secondary legislation and it has been held by the Tribunal that it is that very inconsistency which led to discarding of provisions in the impugned notification that insist upon restriction not contemplated in section 26 of Special Economic Zone Act, 2005. The application is devoid of merit and deserves to be rejected.
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