TMI Blog2018 (6) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order. 2. The brief facts of the case are that the respondents were engaged in providing the taxable services under the categories of construction of commercial and industrial building, construction of residential complex, transport of goods by road, management consultants, site preparation and clearance, architect services and real estate agents services. During the course of audit conducted on 09.05.2008 and from 12.05.2008 to 17.05.2008 for the period 2006- 07 to 2007-2008 by Audit Wing of the Service Tax Commissionerate, Delhi. It was noticed that on 01.06.2007, the notice was having 14 running projects on which they availed the scheme available under Works Contract (Composite scheme for payment of Service Tax) Rules, 2007 w.e.f. 01.06.2007. As per CBEC Circular No.98/1/2008- ST, dated 04.01.2008 which is an amendment to its previous Circular No.97/7/2007-ST, dated 23.08.2007, it has been clarified vide reference Code 097.03/04-1-08 that any provider of service is not entitled to avail the Composition Scheme under Works Contract Rules, 2007 on the projects which are running prior to 01.06.2007. Further, the noticee appeared to have short paid Service Tax on the advanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or Payment of Service Tax) Rules, 2007 w.e.f. 01.06.2007. On these 14 projects, they had paid Service Tax under the composite scheme @ 2.6% or 4.12%. 3.2 As per CBEC Circular No.98/1/2008-ST, dated 04.01.2008, which is an amendment to its previous Circular No.96/7/2007-ST dated 23.08.2007, it has been clarified vide reference Code No.097.03/04-1-08 that any provider of service is not entitled to avail the Composition Scheme under Works Contract Rules, 2007 on the projects which are running prior to 01.06.2007. The same reads as:- Prior to 1.6.2007, service provider classified the taxable service under erection, commissioning or installation service (section 65 (105) (zzd)] commercial or industrial construction service (section 65(105)(zzq) or construction of complex-service [section 65(105)(zzzh), as the case may be, and paid Service Tax accordingly. The contract for the service was a single composite contract. Part of Service Tax liability corresponding to payment received was discharged and the balance amount of Service Tax is required to be paid on or after 1.6.2007 depending upon receipt of payment. Classification of a taxable service is determined based on the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Notification No.4/2005-ST dated 01.03.2005, Notification No.19/2005-ST dated 07.06.2005 Notification No.01/2006-ST dated 10.03.2006. 3.6 Whereas exemption Notification No.15/2004-ST datedf 10.09.2004, applicable to Commercial or Industrial Construction Services‟ read as under: [Notification No.15/2004-ST dated 10.09.2004] Service Tax- Effective rate of duty for construction service In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the taxable service provided by a commercial concern to any person, in relation to construction service, from so much of the Service Tax leviable thereon under section 66 of the said Act, as is in excess of Service Tax calculated on a value which is equivalent to thirty-three per cent of the gross amount charged from any person by such commercial concern for providing the said taxable service: Provided that this exemption shall not apply in such cases where- (i) The credit of duty paid on inputs or capital goods has been taken under the provisions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service for providing such service. This Notification shall come into force on the 16th day of June, 2005 . 3.8 Notification No.15/2004-ST dated 10.09.2004 and Notification No.18/2005-ST dated 7.6.2005 referred above, were rescinded vide Notification No.2/2006-ST dated 01.03.2006 and another consolidated exemption Notification No.1/2006-ST dated 1.3.2006 incorporating all the services where abatement from gross value for levy of Service Tax was provided, was issued. However, the conditions for availing the abatement of 67% of the gross taxable value as well as the Explanation‟ of gross amount charged under the said notifications were retained in respect of Commercial or Industrial Construction Service‟ and Construction of Complex Service‟. 3.9 As discussed in para 3.3 and 3.4 above, the noticee did not appear eligible for discharging their Service Tax liability by switching over to the composite scheme as given under Works contracts Services and also did not appear eligible for availing the abatement as given under Notification No.12/2003-ST dated 20.06.2003. They were required to discharge their Service Tax Liability in the manner as prescribed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. AR submits that the respondents are not entitled for exemption of services provided in SEZ as they have to pay service tax first and then claim the refund of the services provided in SEZ. Therefore, the impugned order to that effect is to be set aside. 6. On the other hand, the Ld. Counsel for the respondents relied on the decision in the case of Intas Pharma Ltd. Manu/CS/0128/2013 and Tata Consultancy Services Ltd. Manu/CM/0179/2012. 7. Heard the parties and considered the submissions made by both sides. 8. The short issue involved before us is that whether the respondent is entitled for exemption of services provided in SEZ during the period April 2000 to March 2010 in terms of Provisions of Section 26 of SEZ Act, 2005 or not. A similar issue was examined by this Tribunal in the case of Tata Consultancy Services Ltd. Wherein this Tribunal observed as under: 5.1 As regards the refund claim of ₹ 6,66,794/- which has been rejected on the ground that the services to which this amount pertains do not have direct nexus with the authorized operations undertaken by the appellant, this stand of the department is totally incorrect. The approval committee which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act, 1944 read with Section 83 of the Finance Act, 1994. If the appellant is eligible for refund under Section 11B, then the same cannot be denied on the ground that the claim was made under notification No.9/2009-ST. In this case, there is no dispute that the services were provided in relation to the authorized operations of the appellant within the SEZ. From the records it is seen that the appellant has filed the refund claim within the time period provided for In Section 11B and the appellant has borne the incidence of taxation. 5.3 Services provided to a SEZ or unit in the SEZ is deemed as export as per the provisions of Section 2 (m) (ii) of the SEZ Act, 2005 and as per Rule 31 of the SEZ Rules, 2006, the appellants are entitled for exemption from payment of service tax on the services which are used or provided to a unit in the SEZ. As per Section 51 of the said SEZ Act, the said provisions prevail over the provisions contained in any other law for the time being in force. It is the avowed policy objective of the Government of India that exports should not bear the burden of taxes. If this policy objective has to be sub-served and the objective realized broader view o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier adverted to, enable claim of exemption by developers or units in SEZ by way of refund of service tax paid for services used in relation to authorized operations in SEZ, insofar as the claim for refund is filed within six months or within such extended period as the Assistant Commissioner or Deputy Commissioner of Central Excise, as the case may be, shall permit. 9. Insofar as Notification No. 15/2009-ST is concerned, Para c of the earlier Notification No.9/2009-ST was substituted. The current requirement is that the exemption claimed by the developer or units of SEZ shall be provided by way of refund o service tax paid on the specified services used in relation to the authorised operations in the SEZ, except for services consumed wholly within the SEZ. On true and fair construction of Notification No. 9/2009 and 15/2009 issued under Section 93(1) of the Act, considered in the light of overarching provisions of Section 7 and 26 (e) of the 2005 Act, the conclusion appears compelling that neither Notification 9/2009 nor 15/2009 disentitle immunity to service tax enjoined by the provisions of the 2005 Act. It therefore appears that Notification 9/2009 and 15/2009 merely con ..... X X X X Extracts X X X X X X X X Extracts X X X X
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