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2021 (1) TMI 441 - HC - Service TaxSelling of surplus power in Domestic Tariff Area and installing dedicated transmission lines into Domestic Tariff Area - surplus electricity supplied in the Domestic Tariff Area as per rule 47 of the Special Economic Zone Rules - to be treated as other business or not - reliance on permission dated 19.12.2006 and the Notifications dated 10.5.2007 and 19.6.2007 along with the provisions of the SEZ Act, 2005 - supply of the electricity to Domestic Tariff Area is beyond the Authorized Operations approved under the Act or not? - services received by the assessee was not shared between authorised operation in Special Economic Zone Unit and Domestic Tariff Area - whether expression wholly consumed referred to in Explanation (iii) of the proviso to para 2(a) of the Notification No. 17/2011-ST would be applicable to sharing business between authorised operation in Special Economic Zone Unit and Domestic Tariff Area Unit - Explanation to para 2(a) of the Notification No. 17/2011-ST - Notification No. 9/2009-ST, and 17/2011-ST. HELD THAT - The Tax Appeal is under Section 35(G) passed by the Customs, Excise and Service Tax Appellate Tribunal, Ahmedabad, is admitted on the substantial questions of law - To be heard along with the the Tax Appeal No. 399/20.
Issues:
1. Interpretation of selling surplus power in Domestic Tariff Area and installing dedicated transmission lines into Domestic Tariff Area. 2. Misconstruing permissions and notifications related to supply of electricity to Domestic Tariff Area. 3. Determination of services shared between authorized operations in Special Economic Zone Unit and Domestic Tariff Area. 4. Applicability of the expression "wholly consumed" in the context of sharing business between authorized operations in Special Economic Zone Unit and Domestic Tariff Area Unit. 5. Fulfillment of conditions of Explanation to para 2(a) of Notification No. 17/2011-ST regarding specified services used for authorized operations. 6. Interpretation of the term "others" in a specific notification and its applicability. 7. Refund directive despite failure to fulfill conditions of specific notifications. Issue 1: The first issue revolves around whether selling surplus power in the Domestic Tariff Area and installing dedicated transmission lines into the same area constitutes carrying on a business other than the one in the Special Economic Zone. The Customs, Excise and Service Tax Appellate Tribunal's decision on this matter is being challenged based on the interpretation of the Special Economic Zone Rules and the nature of the activities conducted. Issue 2: The second issue involves the alleged misinterpretation of permissions granted and notifications issued regarding the supply of electricity to the Domestic Tariff Area. The authorities' decision is being questioned in light of the SEZ Act, 2005, and the Authorized Operations approved under the Act. Issue 3: Issue three concerns the determination of whether the services received by the assessee were shared between the authorized operation in the Special Economic Zone Unit and the Domestic Tariff Area. The correctness of the authorities' decision on this sharing of services is under scrutiny. Issue 4: The fourth issue pertains to the interpretation of the expression "wholly consumed" in the context of sharing business between the authorized operation in the Special Economic Zone Unit and the Domestic Tariff Area Unit. The Customs, Excise and Service Tax Appellate Tribunal's stance on the applicability of this expression is being challenged. Issue 5: In the fifth issue, the focus is on whether the respondent assessee fulfilled the conditions of the Explanation to para 2(a) of Notification No. 17/2011-ST. This revolves around the specified services received and used for authorized operations being deemed as wholly consumed within the Special Economic Zone. Issue 6: Issue six involves the interpretation of the term "others" in a specific notification, particularly in relation to places beyond Special Economic Zones and EOUs. The Customs, Excise and Service Tax Appellate Tribunal's understanding of this term is being questioned. Issue 7: The final issue questions the authorities' decision to direct a refund despite the assessee's failure to fulfill the conditions of Notification No. 9/2009-ST and 17/2011-ST. The validity of this refund directive is under scrutiny. This comprehensive analysis breaks down the judgment into its key issues, providing a detailed examination of each point raised in the appeal before the Gujarat High Court.
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