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2023 (11) TMI 897 - AT - Service TaxLevy of service tax - GTA Services - services consumed within the SEZ area - applicability of N/N. 4/2004 - Reverse charge mechanism - HELD THAT - On perusal of the Show Cause Notice, it is seen that the demand is raised as if the appellant has rendered the GTA Services. In fact the appellant has availed GTA Services for clearances of goods from the SEZ zone to the DTA area. The appellant would be liable to pay the Service Tax only under Reverse Charge basis. There is a factual error in the Show Cause Notice in raising the demand itself. The appellant being a SEZ unit is not liable to pay any taxes and duties as per the provision under Section 26 of the SEZ Act. Further, Section 51 of the said Act has an overriding effect - The decision in the case of M/S. SRF LTD. VERSUS C.C.E., INDORE 2018 (6) TMI 387 - CESTAT NEW DELHI has considered the very same point, where it was held that It was held that consumption of services within Special Economic Zone is intended to bear the utilization by the entities within the special economic zone. By no stretch it can be stated that it intends to restrict such exemption only to the extent that its consumption to be within the geographical boundaries of Special Economic Zone. The Tribunal in the case of M/S. VISION PRO EVENT MANAGEMENT VERSUS CCE ST, CHENNAI 2018 (7) TMI 334 - CESTAT CHENNAI had also considered the issue whether exemption from Service Tax is eligible when the services are availed outside to the SEZ zone, where it was held that The event was held outside the SEZ unit. Even if the event is held outside, since the services were for advertisement of product of SEZ, the services provided is to be considered as consumed within SEZ. It also needs to be mentioned that for availing the services, the SEZ has to get these services approved by the Development Commissioner. The department then cannot contend that these services are not eligible for refund since these are not consumed within SEZ. From the above discussions, we are of the considered opinion that the denial of benefit is unjustified. The impugned order is set aside - Appeal allowed.
Issues involved:
The issues involved in the case are related to the liability of the appellant to pay Service Tax under Goods Transport Agency (GTA) Services for transporting goods from Special Economic Zone (SEZ) to Domestic Tariff Area (DTA), and the applicability of exemptions under the SEZ Act and related Notifications. Summary: Issue 1 - Liability under GTA Services: The appellant, engaged in manufacturing Metal Halide Lamps, availed GTA Services for transporting goods from SEZ to DTA. The demand raised as if the appellant rendered GTA Services was found to be a factual error. The appellant, being an SEZ unit, is liable to pay Service Tax only under Reverse Charge basis. Issue 2 - Applicability of SEZ Act and Notifications: The appellant argued that as an SEZ unit, they are exempt from paying taxes and duties under Section 26 of the SEZ Act, with overriding effect under Section 51. Referring to Notification No. 4/2004, the appellant contended that the consumption of input services need not be limited to SEZ area for exemption. Citing precedents like M/s. SRF Ltd. case, it was argued that even availing services outside SEZ can qualify for exemption. The Tribunal also referred to the case of M/s. Vision Pro Event Management, emphasizing that services provided for SEZ units, even if outside SEZ, can be considered consumed within SEZ, entitling them to tax exemption. In conclusion, the Tribunal set aside the impugned order, allowing the appeal with consequential relief, based on the interpretation of SEZ Act and related Notifications.
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