2023 (12) TMI 7 - AT - Service Tax

Exemption under entry no. 1 of Mega Exemption Notification No. 25/2012-ST dated 20.06.2012 in respect of services provided to UNICEF - Appellant entered into Long Term Agreements with UNICEF for providing technical assistance towards financial human resource management and logistics management for various programs of UNICEF in different states of India - HELD THAT - The appellant was providing certain services to UNICEF and was not paying service tax in respect of said services in view of the understanding that services provided to UNICEF are covered by exemption Notification No.16/2002-ST dated 02/08/2002 and Notification No.25/2012-ST dated 20/06/2012 for the period with effect from 01/07/2012. Therefore, proceedings were initiated against the Appellant through show cause notice dated 19/09/2016 for recovery of service tax for the period from 01/04/2011 to 30/09/2015. The Original Authority has taken Central Excise Customs Notification into consideration to decide the matter related to service tax and held that since UNICEF is not mentioned in Notification No.16/2002-ST dated 02/08/2002. Thus exemption for the services provided to UNICEF is not covered by said service tax Notification. On the contrary Tribunal has held in various cases that UNICEF is covered by exemption Notification No.16/2002-ST. The Appellant is entitled for exemption under Notification No.16/2002-ST dated 02/08/2002 for services provided to UNICEF. Exemption under Notification No.25/2012-ST dated 20/06/2012 for period subsequent to 01/07/2012 which is pari-materia with the Notification No 16/2002-ST will be admissible - the impugned order set aside - appeal allowed.

Summary

Issues Involved:
The issues involved in the judgment are whether the services provided to UNICEF are eligible for exemption under Notification No.16/2002-ST and Notification No.25/2012-ST, and whether the Appellant is liable to pay service tax for the disputed period.

Comprehensive details of the judgment for each issue involved:

1. Exemption under Notification No.16/2002-ST and Notification No.25/2012-ST:
The Appellant, engaged in various services, entered into Long Term Agreements with UNICEF. The department alleged that the Appellant is not eligible for exemption under entry no. 1 of Mega Exemption Notification No. 25/2012-ST for services provided to UNICEF. The Appellant argued that UNICEF can be considered a "United Nations" or "Specified International Organisation" based on legal interpretations and agreements. The Tribunal noted that services provided to UNICEF are covered by exemption Notification No.16/2002-ST and Notification No.25/2012-ST. Citing judicial precedents, the Tribunal held that the Appellant is entitled to the exemption for services provided to UNICEF.

2. Liability for Service Tax:
The department issued a Subsequent Show Cause Notice proposing a service tax demand for the disputed period. The Appellant contended that services provided to UNICEF are exempted from service tax. The Learned Commissioner confirmed the demand, but the Appellant appealed to the Tribunal. The Tribunal, considering the legal interpretations and previous judgments, set aside the impugned order and allowed the appeal, providing consequential relief to the Appellant.

In conclusion, the Tribunal ruled in favor of the Appellant, holding that the services provided to UNICEF are eligible for exemption under the relevant notifications, and the Appellant is not liable to pay service tax for the disputed period.