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2023 (5) TMI 194 - AT - Service TaxExemption from payment of service tax - appellant is having a sector specific Special Economic Zone (SEZ), where they develop/ construct various commercial and residential building and other related infrastructural activities - import of services under reverse charge mechanism - benefit of N/N. 9/2009-ST dated 03.03.2009, 15/2009-ST dated 20.05.2009 and 17/2011-ST dated 01.03.2011 - HELD THAT - Since the issues raised at this juncture by the learned Authorized Representative have the bearing ultimately on availment of benefit of notifications dated 03.03.2009 and 20.05.2009, the matter should be looked into afresh by the original authority. For consideration of the benefit of exemption, it is also required to analyse the notification no. 17/2011-ST dated 01.03.2011 inasmuch as Section 66A was first time brought into the purview of exemption on the said date. Since, the period involved in the present dispute relates to the prior period, the Original Authority should specifically record the observation as to whether benefit of 66A would be available to the appellant or otherwise. The Original Authority should also examine the other ground urged by the appellant in the grounds of appeals annexed to the appeal memorandum. The submissions made before the Tribunal will also be conveyed by the appellant at the time of adjudication of the matter afresh. Appeal allowed by way of remand.
Issues involved: Service tax demand, applicability of exemptions to SEZ unit, interpretation of notifications, benefit of exemption under Section 66A, duty exemption under notifications, approval of services by SEZ authorities.
Summary: Service tax demand: The appeal was filed against the order confirming a service tax demand of Rs.5,92,25,564/- along with penalties imposed under Section 77 and 78 of the Finance Act, 1994 by the Adjudicating Authority. Applicability of exemptions to SEZ unit: The appellant, having a sector-specific Special Economic Zone (SEZ), developed various buildings and infrastructural activities. The appellant interpreted that they were exempt from paying service tax on import of services under notifications issued by the Central Government. The Department disputed the non-payment of service tax, leading to the show cause notice and subsequent adjudication. Interpretation of notifications: The appellant argued that they were not required to pay service tax on the disputed services consumed within the SEZ, as per the substituted notification. The appellant claimed exemption from payment of service tax based on their interpretation of the notifications. Benefit of exemption under Section 66A: The Authorized Representative for Revenue contended that the appellant was not entitled to the benefit of duty exemption under certain notifications as they did not cover services listed under Section 66A. The approval of services by the SEZ authorities was also highlighted as a determining factor. Duty exemption under notifications: The Authorized Representative reiterated that the appellant was not entitled to the benefit of duty exemption under certain notifications as they did not cover services listed under Section 66A. The absence of a registration certificate for the disputed taxable service was emphasized as a reason for denial of benefits under the notifications. Approval of services by SEZ authorities: It was argued that since the disputed services were not approved by the SEZ approval committee, the appellant could not avail the benefits provided under the relevant notifications. Judgment: The Tribunal found that certain issues raised by the Authorized Representative for Revenue were not considered in the show cause notice. The matter was remanded to the Original Authority for fresh consideration, specifically analyzing the notifications and the applicability of Section 66A. The Tribunal emphasized that all aspects raised by the appellant should be addressed during the fresh adjudication proceedings, ensuring a fair opportunity for personal hearing. The appeal was allowed by way of remand for a comprehensive reconsideration of all issues involved.
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