2015 (9) TMI 1088 - AT - Service Tax

Denial of exemption claim to SEZ units - Notification No.4/2004-ST dated 31.3.2004 - Held that - The appellate order demonstrates piecemeal reading of the notification. It not only grants exemption to the service provider providing service to a developer of SEZ but also service provided to a unit of SEZ for consumption thereof within the said location is exempt. But the authorities erroneously constructed the purview of the notification. There is no finding that the appellant is not a management consultancy service provider to a unit in SEZ. It is on record that it was provider of such service but it was not registered. Appellate authority did not doubt status of the appellant. Therefore, denial of the benefit of the notification to the appellant shall result in mockery when the appellant satisfies condition of the notification - Decided in favour of assessee.

Summary

Issues: Delay in filing appeal, applicability of Notification No.4/2004-ST

Delay in filing appeal:
The judgment addresses the issue of delay in filing the appeal. The appellant argued that their meritorious appeal should not be dismissed due to the delay as they took prompt steps upon receiving the recovery notice to obtain a copy of the order for appeal remedy. The appellant's contention was considered, and the delay was ultimately condoned, allowing the appeal to be admitted.

Applicability of Notification No.4/2004-ST:
The judgment delves into the interpretation of Notification No.4/2004-ST dated 31.3.2004 concerning the exemption from service tax liability for services provided to a unit in a Special Economic Zone (SEZ). The appellant contended that the services they provided to a unit in the SEZ were exempt under this notification. However, both lower authorities had failed to consider this notification, leading to an erroneous decision. The appellate order was found to have misconstrued the notification, which not only exempts services to a SEZ developer but also services consumed within the SEZ. The judgment highlighted that the appellant was indeed a management consultancy service provider to a unit in the SEZ, despite not being registered as such. The denial of the notification's benefit to the appellant was deemed unjust as the appellant met the conditions of the notification. Consequently, the appeal was allowed in favor of the appellant.

This judgment from the Appellate Tribunal CESTAT CHENNAI addressed two main issues: the delay in filing the appeal and the misinterpretation of the applicability of Notification No.4/2004-ST regarding service tax exemption for services provided to a unit in a Special Economic Zone. The tribunal considered the appellant's argument regarding the delay, ultimately condoning it and admitting the appeal. Furthermore, it analyzed the notification in question, emphasizing that the appellant's services to a unit in the SEZ were indeed exempt under the notification, despite the lower authorities' oversight. The judgment rectified the misinterpretation and allowed the appeal, recognizing the appellant's eligibility for the exemption.