2023 (7) TMI 881 - AT - Service Tax

Exemption from Service Tax - services rendered by the appellant to units in Special Economic Zone (SEZ) - Special Economic Zone Act, 2005 (SEZ Act) - HELD THAT - The present proceedings have arisen out of the Statement of Demand dated May 06, 2014 which refers to the allegations contained in the show cause notice dated October 15, 2013 which had been adjudicated upon and which had resulted in the aforesaid decision of the Tribunal in M/S DLF ASSETS PVT. LTD. VERSUS THE COMMISSIONER, SERVICE TAX, DELHI I 2020 (11) TMI 35 - CESTAT NEW DELHI in the matter of the appellant, where it was held that Commissioner was not justified in examining whether the conditions set out in the Notification dated March 3,2009 were satisfied or not for grant of any exemption from service tax. Section 26(2) of the SEZ Act does provide that the Central Government may prescribe the manner in which, and the terms and conditions subject to which, the exemptions shall be granted to the Developer under sub-section (1) but what is important to notice, is that, the word prescribe would mean prescribed by rules made by the Central Government under the SEZ Act, in view of the definition of prescribed under section 2(w) of the SEZ Act. The Notification dated March 3, 2009, which has been issued under section 93 of the Finance Act, therefore, has no application. The period of dispute in the Statement of Demand is for the subsequent period from 2012 upto 2013 - As the charges levelled against the appellant in the Statement of Demand are those that were made in the show cause notice dated October 15, 2013, the order dated October 30, 2017 passed by the Commissioner (Appeal) confirming the demand has, in view of the decision of the Tribunal in DLF Assets, to be set aside and is set aside. Appeal allowed.

Summary

Issues involved:
The main issue in this case is whether the services provided by the appellant to units in Special Economic Zone (SEZ) are exempt from service tax under the Special Economic Zone Act, 2005 (SEZ Act).

Details of the judgment:

Issue 1: Exemption under SEZ Act
The Tribunal considered whether the services rendered by the appellant to units in SEZ would be exempt from service tax under the SEZ Act. It was noted that a previous decision by a Division Bench of the Tribunal in the case of M/s. DLF Assets Pvt. Ltd. had ruled in favor of the appellant for the period from 2007-08 up to 2011-12. The present proceedings arose from a Statement of Demand for the subsequent period from 2012 to 2013, based on allegations from a show cause notice dated October 15, 2013. The Commissioner's order confirming the demand was set aside in light of the previous Tribunal decision in the case of DLF Assets, resulting in the appeal being allowed.

In conclusion, the Tribunal ruled in favor of the appellant, setting aside the Commissioner's order confirming the demand for service tax. The decision was based on the interpretation of the SEZ Act and previous Tribunal rulings in similar cases.