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TMI Blog2013 (12) TMI 492X X X X Extracts X X X X X X X X Extracts X X X X ..... on about issue of invoices and accounts would show. Therefore in our view in terms of definition of person, it cannot be said that the units in SEZ and DTA units can be considered as separate person. The goods as soon as they are manufactured become liable to duty irrespective of the fact whether they are sold or not. This is the reason while Central Excise statute has separate provision for remission of duty in case of goods which are destroyed in accident or fire etc. before removal and in the case of goods which become non-marketable and therefore are to be destroyed. On the other hand, service is levied on the transaction between a person and another person. In the case of service tax levy, presence of two persons is a must and these persons have necessarily to be legal persons since there is no definition of person in the Service Tax Act which would mean person has to be understood the way it is understood otherwise - Revenue has failed to show that service tax levy is attracted on the services rendered by SEZ units to DTA units of L & T unit in this case - Decided in favour of assessee. - ST/329-330/2011 - Final Order Nos. A/1664-1665/2012-WZB/AHD - Dated:- 7-11-2012 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax has been confirmed with interest and penalties have been imposed on the following grounds : (i) There is an order for service placed by L T DTA Unit on the L T SEZ Unit. Such order need not be essentially an agreement. Further, in the quoted invoice, under the column representing Agreements Dated , date 30-9-2009 has been recorded, which indicates that the service has been provided in execution of the agreement despite the same being claimed to be in-house order by L T SEZ Unit. (ii) While an internal document might be in the form of voucher or debit note, it can never be described in the form of an invoice. L T SEZ unit issues invoices for recovering charges and these transactions are being recorded in the books of accounts of the unit. For this reason, the claim that it is not a commercial invoice, but an essential document raised for internal accounting purpose is not acceptable. (iii) The agreement that the activities of L T SEZ Unit and L T DTA unit are services, which are ultimately consumed by the project owner requiring L T to execute the EPC contract, has no relevance. Between L T SEZ unit and L T DTA unit, there is taxable service. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... service tax is levied under the Finance Act, 1994 on services provided by a person to any person which would mean that the person has to be a separate entity and has to be other than the person providing the services. When a division of a company is providing services to another division, it cannot be said that it is charging an amount for services provided from any other person. He relied upon several decisions to submit that a transaction to take place, there has to be two persons. 3.2 The Commissioner has wrongly relied upon Rule 19(7) of SEZ Rules, 2006 to hold that the unit located in SEZ is a distinct person from the unit located in DTA. It was submitted that the Rules itself state that it was not necessary for a SEZ unit to be a separate legal entity from the enterprise operating in Domestic Tariff Area. Further, SEZ Act has no relevance for interpretation of service tax law. 3.3 The Commissioner has erred in relying upon the Rule 4(3)(A) of Service Tax Rules, 1994 as this provision requires registration of separate premises only for the purpose of compliance of service tax provisions. The same person being the owner can apply for separate registration in respect of diff ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . First of all, we have considered whether the appellants themselves are treating the units in SEZ and DTA as separate legal entities. Reliance has been placed on the fact that invoices have been issued and agreement has been entered into. The learned Counsel fairly admitted that an agreement was entered into and invoices were issued and he submits that this was unnecessarily done by the company and he would not be able to explain the reason behind this. Further he submits that the SEZ units do not have separate balance-sheet and audited accounts and they are considered as divisions of L T for all statutory and other SEZ purposes. He also submitted that there was no actual payment made by one unit to other even though invoice has been issued and there was no transfer of money by way of cheque which has not been contradicted at all by the Revenue. Therefore, merely the fact that invoices have been issued and agreement was entered into cannot discriminate against the appellants to take a view that SEZ units are separate entity irrespective of legal position, so far as the balance-sheet and audited accounts are concerned, we find ourselves in agreement. Under these circumstances, we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scussion about issue of invoices and accounts would show. Therefore in our view in terms of definition of person, it cannot be said that the units in SEZ and DTA units can be considered as separate person. 9. Next question arises whether the definition of persons considered with Rule 19(7) of SEZ Rules would require us to consider the SEZ unit as a separate legal entity. Rule 19(7) is very clear. It starts with the words if an enterprise . This shows that it is one person which is under consideration under the Rule who is operating both as a domestic tariff area unit as well as a special economic zone unit. The rule is specifically made for a single person who is operating both as a DTA unit as well as SEZ unit or who is operating units in SEZ as well as DTA. If there are different persons, this rule is not applicable at all. The very fact that Rule 19(7) has been brought into play by the Revenue would show that the Revenue is on a wrong wicket. None the less, rule provides if an enterprise has a DTA unit and SEZ unit, both shall have two distinct identities with separate books of account. What the rules require is that the SEZ unit and DTA unit should have separate books of acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndia was not a person in legal terminology. The person was the Corporate body and not its branch or permanent establishment. The income tax assessment was made on the corporate body and not on its branch or permanent establishment. All the above decisions support the case of appellant. 10. We find that the reliance of the AR on the decision in the case of RPG Enterprises Ltd. is misplaced since what was being considered in this case was services provided by a company (part of a group to another company which is part of the same group). There was no dispute that both were separate legal entities. In view of the conclusion reached by us that SEZ unit and DTA unit of L T unit cannot be considered as separate legal entities, this decision is not relevant. 11. Coming to the decision of the Larger Bench in the case of ISPAT Industries Ltd. reported in 2007 (209 E.L.T. 185 (Tri.-LB), the decision in that case was in the matters relating to valuation of excisable goods. In the case of Central Excise Law, the taxable event is manufacture. The goods as soon as they are manufactured become liable to duty irrespective of the fact whether they are sold or not. This is the reason while C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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