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2024 (12) TMI 279 - AT - Service TaxEligibility of sub-contractor provided service in SEZ on behalf of the main contractor for exemption from service tax - N/N. 09/2009-ST dated 03.03.2009 as amended by N/N. 15/2009-ST dated 20.05.2009 as well as subsequent N/N. 17/2001-ST dated 01.03.2011, 40/2012-ST dated. 20.06.2012 and N/N. 12/2013 dated 01.07.2013 - HELD THAT - It is found that the service provided by the appellant as a sub- contractor to the main contractor for the authorized operation of SEZ is not liable to Service Tax. This issue has been considered in the appellant s own case RANDHAWA CONSTRUCTION VERSUS COMMISSIONER OF CENTRAL EXCISE ST, VADODARA-I 2024 (4) TMI 429 - CESTAT AHMEDABAD , wherein the following order has been passed ' it is settled that the service of sub- contractor provided in SEZ shall be eligible for exemption under Notification No. 04/2004-ST and other identical notifications.' In the view of the above judgment in appellant s own case, as well as various judgments cited by the appellant, the issue that whether the sub-contractor though provided the service in SEZ for and on behalf of the main contactor is liable to service tax, has been settled in the appellant s favour. Accordingly, the issue is no longer res-integra. The impugned order is not sustainable, hence, the impugned order is set aside - Appeal is allowed.
Issues Involved:
1. Eligibility of a sub-contractor for exemption from service tax under specific notifications when providing services in a Special Economic Zone (SEZ) on behalf of a main contractor. Issue-wise Detailed Analysis: 1. Eligibility for Service Tax Exemption for Sub-contractors in SEZ: The primary issue in this case is whether a sub-contractor providing services in a SEZ on behalf of a main contractor is eligible for exemption from service tax under Notification No. 09/2009-ST dated 03.03.2009 and its subsequent amendments. The appellant, acting as a sub-contractor, provided services to a main contractor who was engaged by a SEZ unit. The appellant contends that this issue is settled in their favor based on previous judgments, including their own case, which support the eligibility for exemption under the specified notifications. The appellant's counsel argued that the service provided to the SEZ unit, even through a sub-contractor, qualifies for exemption as it pertains to authorized operations within the SEZ. The counsel cited several judgments, including those from CESTAT and the Supreme Court, which have consistently ruled that services provided in relation to authorized operations in an SEZ are exempt from service tax, regardless of whether they are provided directly by the main contractor or through a sub-contractor. The Revenue, represented by the Additional Commissioner, argued against the exemption, maintaining the position that the exemption is not applicable to sub-contractors as per the existing provisions and previous rulings. The adjudicating authority had previously confirmed the demand for service tax on the basis that the sub-contractor is not directly providing services to the SEZ unit but rather to the main contractor. 2. Tribunal's Findings and Conclusion: Upon careful consideration of the submissions and records, the Tribunal found that the service provided by the appellant as a sub-contractor to the main contractor for authorized operations in the SEZ is not liable to service tax. The Tribunal emphasized that the exemption notification applies as long as the services are related to authorized operations within the SEZ and are received by a developer or unit of the SEZ. The Tribunal noted that the appellant's case aligns with previous judgments where similar circumstances were considered, and exemptions were granted. The Tribunal referenced the decision in the case of Shyam Engineers and others, which clarified that the exemption applies to services provided in relation to authorized operations in SEZ, even when provided by sub-contractors. The Tribunal concluded that the appellant's services met the criteria outlined in the exemption notifications, thereby entitling them to the exemption. 3. Judgment: The Tribunal set aside the impugned order, allowing the appeal. It held that the substantial benefit of the exemption notification cannot be denied based on procedural technicalities. The Tribunal reiterated that the issue is no longer res-integra, as it has been settled in favor of the appellant through consistent judicial pronouncements. Consequently, the appellant's services as a sub-contractor in the SEZ are exempt from service tax under the relevant notifications. The judgment underscores the principle that services related to authorized operations in SEZs, whether provided directly or through sub-contractors, are eligible for service tax exemption, reinforcing the appellant's entitlement to such benefits.
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