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2017 (10) TMI 213 - AT - Service TaxCourier services - taxability - benefit of N/N. 9/2009-ST dated 3.3.2009 and 17/2011-ST dated 01.3.2011 - It is the case of the Revenue that the said exemption was eligible only if the services are wholly consumed within the SEZ and that the services rendered by the appellant are partly outside the SEZ and partly within the SEZ - Held that - the said notification extends the benefit of non-payment of service tax to a person who renders services to developer or units in Special Economic Zone for consumption in special economic zone - Similar issue came up before the Tribunal in the case of Orix Auto Infrastructure Services Ltd Vs CST Mumbai 2015 (11) TMI 346 - CESTAT AHMEDABAD wherein the benefit of similarly placed N/N. 4/04-ST was considered and the Bench took a view in favor of the appellant and held that There is no dispute that the appellant herein rendered service of tour operator for transportation of employees of a unit situated in SEZ - appeal allowed - decided in favor of appellant.
Issues:
1. Whether the appellant is liable to discharge service tax liability on "courier services" rendered to a unit situated in SEZ or otherwise. Analysis: The appeal in question was directed against a specific order-in-appeal dated 22/02/2016. The central issue revolved around determining the appellant's liability to discharge service tax on courier services provided to a unit within a Special Economic Zone (SEZ). The appellant had claimed exemption under Notification No. 9/2009-ST and 17/2011-ST, arguing that the services were not wholly consumed within the SEZ. The Revenue contended that the exemption applied only if the services were entirely consumed within the SEZ, leading to a demand being raised and confirmed. Both lower authorities interpreted the term "wholly consumed" to deny the appellant the benefit of exemption. Upon reviewing Notification No. 9/2009-ST and its amendments, the Tribunal noted that the exemption applied to services rendered to developers or units in SEZ for consumption within the SEZ. Reference was made to the interpretation of the phrase "wholly consumed" in a previous case, Norasia Container Lines Vs CCE New Delhi, where it was held that services used for authorized operations within the SEZ were exempt from service tax liability. Another case, Orix Auto Infrastructure Services Ltd Vs CST Mumbai, supported this interpretation, relying on the Norasia Container Lines decision. A more recent case, Reliance Ports and Terminals Ltd Vs CCE Thane, further reinforced the position that services provided to SEZ units were not subject to service tax under Section 26(1)(e) of the SEZ Act. The Tribunal emphasized that Notification No. 9/2009-ST and its amendments were issued to operationalize the exemption available to SEZ units under the SEZ Act, 2005. Based on these legal precedents and interpretations, the Tribunal concluded that the impugned order was unsustainable and set it aside, thereby allowing the appeal in favor of the appellant.
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