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2014 (9) TMI 215 - AT - Service TaxBusiness auxiliary service and renting of immovable property service provided in Special Economic Zone (SEZ) - Notification 4/2004-ST dated 31.3.2004 - it is contended that, the services are in respect of development of Special Economic Zone (SEZ) project and are consumed within the SEZ hence the benefit of the Notification was wrongly denied - Revenue submitted that as the services were not consumed within the SEZ - Held that - there is no authorisation by the developer in favour of the applicant. The authorisation is in favour of M/s. A2Z Online Services Pvt. Ltd. - the letter dated 26.12.2006 is not before the lower authorities. - prima facie we find it is not a case for total waiver of service tax - stay granted partly.
Issues:
- Whether the applicant is entitled to the benefit of Notification 4/2004-ST dated 31.3.2004 for waiver of pre-deposit of service tax. - Whether the services provided by the applicant fall under the purview of the Notification for exemption from service tax. - Whether the applicant's claim for waiver of pre-deposit of service tax is justified based on the evidence presented. Analysis: Issue 1: Entitlement to Notification 4/2004-ST dated 31.3.2004 The applicant contended that they are entitled to the benefit of Notification 4/2004-ST as the services rendered were in connection with a Special Economic Zone (SEZ) project. They argued that the services were consumed within the SEZ and hence, the benefit of the Notification should apply. However, the Revenue argued that the services provided did not qualify for the exemption as they were not consumed within the SEZ. The Tribunal noted that the applicant failed to provide evidence of authorization by the developer in their favor, as required by the Notification. The Tribunal found that the authorization was in favor of another entity, M/s. A2Z Online Services Pvt. Ltd., and not the applicant. Consequently, the Tribunal ruled that it was not a case for a total waiver of service tax. Issue 2: Nature of Services Provided The Revenue contended that the services provided by the applicant, including liaison activities, did not relate to the development, operation, or maintenance of the SEZ. They argued that the demand for service tax was justified based on the nature of the services rendered. The Tribunal considered the scope of services provided and found that certain activities, such as liaison services, were not directly related to the SEZ project. This led to the conclusion that the demand for service tax was appropriate for the services that did not fall under the purview of the Notification. Issue 3: Justification for Pre-deposit Waiver The applicant sought a waiver of pre-deposit of service tax based on their interpretation of the Notification and the evidence presented. They argued that the demand for service tax was not sustainable considering the circumstances of the case. The Tribunal acknowledged the arguments presented by the applicant but emphasized the lack of proper documentation and authorization from the developer in favor of the applicant. Despite this, the Tribunal granted partial relief by directing the applicant to deposit a specified amount within a stipulated period, with the remaining dues being waived subject to compliance. In conclusion, the Tribunal's decision focused on the specific requirements outlined in Notification 4/2004-ST dated 31.3.2004, the nature of services provided by the applicant, and the justification for the waiver of pre-deposit of service tax. The ruling highlighted the importance of fulfilling the conditions set forth in the Notification for availing exemptions and the need for proper documentation to support claims for relief from service tax liabilities.
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