2013 (3) TMI 738 - AT - Service Tax

Summary

Issues involved: Interpretation of Notification No. 4/2004-Service Tax for exemption of duty on services provided to SEZ units, determination of service consumption within SEZ, evidence requirement for claiming benefit under the notification, imposition of penalties.

Summary:

Issue 1: Interpretation of Notification No. 4/2004-Service Tax
The appellant, engaged in man-power supply to SEZ units, claimed benefit under Notification No. 4/2004-Service Tax. The notification exempts taxable services provided to SEZ units from duty subject to certain conditions. The appellant contested a demand for Service Tax, arguing their eligibility under this notification.

Issue 2: Determination of service consumption within SEZ
The adjudicating authority alleged that the services were not consumed within the SEZ, leading to the demand for Service Tax and penalties. The appellant provided evidence of supplying labor to SEZ units, but the authority found the evidence insufficient to prove consumption within the SEZ.

Issue 3: Evidence requirement for claiming benefit under the notification
The appellant submitted evidence of supplying labor to SEZ units for in-factory consumption, but the authority required proper accounts from the service recipients to establish service consumption within the SEZ. The appellant expressed willingness to provide additional evidence to prove service consumption within the SEZ.

Issue 4: Imposition of penalties
The authority confirmed the demand for Service Tax, imposed penalties, and the appeal was made to the Tribunal. Both sides presented their arguments, with the Revenue supporting the authority's findings.

The Tribunal considered the submissions and found that the services provided by the appellant were eligible under the notification. As service provision and consumption occur simultaneously, the evidence of employing workers in the SEZ was deemed sufficient to establish service consumption within the SEZ. The case was remanded back to the adjudicating authority for fresh consideration based on this observation, directing the appellant to produce additional evidence of worker's register and muster roll to support their claim under the notification.

Therefore, the appeal was allowed by way of remand, keeping all issues open, and the stay application was disposed of accordingly.