2015 (11) TMI 346 - AT - Service Tax

Demand of service tax - Rent-a-Cab Service provided to SEZ unit - benefit of Notification 4/2004-ST dated 31/03/2004 - Held that - lower authorities have confirmed the demands only on the ground that the benefit of Notification 4/2004 is available only in those cases where services are consumed within the special economic zone and units situated therein while it is the case of the appellant that the services are rendered for transportation of the employees to and from their residences located outside SEZ. - There is no dispute that the appellant herein rendered service of tour operator for transportation of employees of a unit situated in SEZ. If that be so the ratio of the judgment of the Tribunal, 2013 (7) TMI 703 - CESTAT AHMEDABAD , will apply - Impugned order is set aside - Decided in favour of assessee.

Summary

Issues:
Confirmation of demand of service tax under the category of Rent-a-Cab Service due to services rendered to a unit located in SEZ and payment of service tax, entitlement for benefit of Notification 4/2004-ST, interpretation of provisions regarding consumption of services within SEZ, exemption from service tax for services rendered to a unit in SEZ for authorized operations, applicability of Notifications 9/2009 and 15/2009 for claiming refund of Service Tax.

The judgment addresses the issue of confirmation of demand of service tax under Rent-a-Cab Service category. The appellant contended that service tax liability did not arise as services were rendered to a unit in SEZ, and they were entitled to benefit under Notification 4/2004-ST. Lower authorities confirmed demands based on services consumed within SEZ, while appellant argued services were for transportation of employees to and from residences outside SEZ. The Tribunal referred to Norasia Container Lines case, emphasizing harmonious reading of provisions and exemption for services rendered to a unit in SEZ for authorized operations. Rule 31 of SEZ Rules was cited to support exemption from service tax for services to a unit in SEZ for authorized operations. Citing Intas Pharma Ltd. case, the Tribunal held that Notifications 9/2009 and 15/2009 facilitated claiming refund of Service Tax for services provided to a unit in SEZ. As the appellant provided tour operator services for employees of a unit in SEZ, the Tribunal applied the aforementioned judgments, setting aside the impugned orders and allowing the appeal.

In conclusion, the Tribunal allowed the appeal, setting aside the impugned orders confirming demand of service tax under Rent-a-Cab Service category. The judgment highlighted the importance of harmonious reading of provisions, exemption for services rendered to a unit in SEZ for authorized operations, and facilitative nature of Notifications 9/2009 and 15/2009 for claiming refund of Service Tax. The decision was based on the appellant's provision of tour operator services for employees of a unit in SEZ, aligning with precedents and legal provisions supporting exemption from service tax in such circumstances.