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TMI Blog2022 (6) TMI 1085X X X X Extracts X X X X X X X X Extracts X X X X ..... t charges collected by them as these fall under Business Support Services. Besides the demand of Service Tax on ocean freight charges in Service Tax Appeal No. 157 of 2012, it is alleged by the Department that the appellant, which is a SEZ unit, is not eligible for refund/credit in terms of Notification No. 04/2004 dated 31.03.2004 in respect of the input services for the reason that the services are not physically consumed within the SEZ unit. Show Cause Notices were issued to the appellant, proposing to demand Service Tax on these two issues. 4. After due process of law, the Original Authority vide order impugned herein confirmed the demand along with interest and imposed penalty. Aggrieved by such order, the appellant is now before the Tribunal. 5. Shri Raghavan Ramabadran, Learned Counsel, appeared and argued on behalf of the appellant. 5.1 He submitted that in Service Tax Appeal No. 157 of 2012, the demand has been confirmed on ocean freight charges collected by the appellant alleging that the appellant has provided Business Support Services for the period from May 2006 to March 2009. Further, demand of Service Tax of Rs.53,93,244/- has ben confirmed alleging that the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) M/s. Vision Pro Event Management v. Commr. of C.Ex. & S.T., Chennai [2019 (365) E.L.T. 555 (Tri. - Chennai)]; (ii) C.S.T. v. M/s. Southern Cyber Logistics Pvt. Ltd. [2018 (7) TMI 174 - CESTAT, Chennai]; (iii) M/s. Freight System (I) Pvt. Ltd. v. C.C.E. [2018 (7) TMI 333 - CESTAT, Chennai]; (iv) M/s. Maersk India Pvt. Ltd. v. C.S.T., Chennai [Final Order No. 40608/2018 dated 12.03.2018 - CESTAT, Chennai]; (v) M/s. Bharti Airtel v. Commr. of G.S.T. & C.Ex., Chennai South [2018-VIL-193-CESTAT-CHE-ST] 5.3.3 Learned Counsel for the appellant also adverted to the decision in the case of M/s. GMR Aerospace Engineering Ltd. v. Union of India reported in 2019 (31) G.S.T.L. 596 (A.P.) wherein the Hon'ble Andhra Pradesh High Court has held that Section 51 of the SEZ Act would have overriding effect over Service Tax Notifications. The said decision was followed by the Tribunal in the case of M/s. TVS Logistics Pvt. Ltd. v. The Principal Commissioner of Service Tax, Chennai South reported in 2021 (8) TMI 450 - CESTAT, Chennai 5.4 He prayed that the appeals may be allowed. 6. Smt. K. Komathi, Learned Authorized Representative for the respondent, supported the findings in the impug ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by road, rail, inland waterways, sea or air; 12. The appellant takes responsibility for safety of goods and issues a document of title which is a multi-modal bill of lading and commits to delivery at the consignee's end. To ensure such safe delivery, appellant contracts with carriers, by land, sea or air, without diluting its contractual responsibility to the consignor. Such contracting does not involve a transaction between the shipper and the carrier and the shipper is not privy to the minutiae of such contract for carriage. The appellant often, even in the absence of shippers, contract for space or slots in vessels in anticipation of demand and as a distinct business activity. Such a contract forecloses the allotment of such space by the shipping line or steamer agent with the risk of non-usage of the procured space devolving on the appellant. By no stretch is this assumption of risk within the scope of agency function. Ergo, it is nothing but a principal-to-principal transaction and the freight charges are consideration for space procured from shipping line. Correspondingly, allotment of procured space to shippers at negotiated rates within the total consideration in a multi- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 66 of the said Act,...................." The doubt has arisen as the notification uses the words "consumption of services within Special Economic Zone". The period involved is February, 2008. SEZ Act, 2005 has come into force w.e.f. 10-2-2006. Section 26 of the Act provides for various exemptions and concessions to SEZ unit/developers. Section 51 lays down that the SEZ Act will have overriding effect over any other Act for the time being in force. The relevant section is reproduced as under :- "51. Act to have overriding effect - The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act." 5.2 The intention of the notification as well as Section 26 of the SEZ Act, is to exempt the taxes/duties payable on goods and services provided to SEZ unit/developer, the supply of goods and services to SEZ being deemed exports. Therefore, taking into consideration the impact of Section 51 of the SEZ Act which provides for overriding effect over any other law, we are of the considered opinion that the benefit of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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