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TMI Blog2022 (9) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ch 2011 to 14th June 2011 - HELD THAT:- The issue stands settled by the decision of the Hon ble High Court of Telengana and Andhra Pradesh in GMR AEROSPACE ENGINEERING LIMITED AND ANOTHER VERSUS UNION OF INDIA AND OTHERS [ 2019 (8) TMI 748 - TELANGANA AND ANDHRA PRADESH HIGH COURT] where it was held that the SEZ Act 2005 defines the word prescribe under Section 2(w) to mean the rules framed by the Central Government under the SEZ Act, 2005. The space is also not left unoccupied, as the Central Government has issued a set of Rules known as the Special Economic Zones Rules, 2006 , wherein the Central Government has prescribed the terms and conditions for grant of exemptions under Rule 22. Therefore, there is no question of comparing the terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty of like amount under section 78 of Finance Act, 1994, is in appeal before us with the plea that the adjudication order had failed to appreciate that the services rendered by them to M/s Credit Suisse Services (India) Pvt Ltd was not taxable owing to the privileges conferred upon the recipient by Special Economic Zones Act, 2005. 2. It was alleged that between June 2009 and February 2011, the appellant herein had rendered taxable service' valued at ₹ 80,16,46,587 on which the liability of ₹ 8,25,69,598 should have been discharged and, in accordance with notification no. 9/2009-ST dated 3rd March 2009 and as amended by notification no. 15/2009-ST dated 20th May 2009, claimed as a refund thereafter upon compliance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for appellant and Learned Authorized Representative at length. The primary contention of Learned Counsel is that the issue of taxability of services rendered to units in special economic zones (SEZ) stands settled by the decision of the Hon ble High Court of Telengana and Andhra Pradesh in GMR Aerospace Engineering Limited v. Union of India others [2019-VIL-489-TEL] holding that 24. Therefore, the terms and conditions subject to which the exemptions are to be granted under sub-section (1) of Section 26 should be prescribed by the Rules made by the Central Government under the SEZ Act, 2005. Being conscious of this fact, the executive has incorporated Rule 22 in the SEZ Rules, 2006 issued in exercise of the power conferred by Section 55 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 26, and (2) also subject to the terms and conditions prescribed in the Customs Act, 1962, the Customs Tariff Act, 1975, the Central Excise Act, 1944, the Central Tariff Act, 1985 and the Finance Act, 1994. This is especially so, since the authority of the Central Government to prescribe the terms and conditions subject to which exemptions may be granted under Section 26(1), flows only out of sub-section (2) of Section 26. The word prescribe is verb. Generally no enactment defines the word prescribe . But the SEZ Act 2005 defines the word prescribe under Section 2(w) to mean the rules framed by the Central Government under the SEZ Act, 2005. The space is also not left unoccupied, as the Central Government has issued a set of Rules know ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (b) exemption from any duty of customs, under the Customs Act, 1962 or the Customs Tariff Act, 1975 or any other law for the time being in force, on goods exported from, or services provided, from a Special Economic Zone or from a Unit, to any place outside India: (c) exemption from any duty of excise, under the Central Excise Act, 1944 or the Central Excise Tariff Act, 1985 or any other law for the time being in force, on goods brought from Domestic Tariff Area to a Special Economic Zone or Unit, to carry on the authorised operations by the Developer or entrepreneur; (d) drawback or such other benefits as may be admissible from time to time on goods brought or services provided from the Domestic Tariff Area into a Special Economic Zone or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation was not available for the entire period of the dispute but, at the same time, it cannot be denied that at some point, the eligibility did exist. The procedural infirmities, for a shorter or longer time, does not in any way supplant the exemption accorded to the impugned supply of services. Furthermore, the findings of the adjudicating authority do not arrive at a conclusion that, but for the said procedural infirmities, the eligibility of the appellant to render such services without payment of tax was in question. In the light of decision cited supra, the overriding nature of the exemption afforded by section 26 of Special Economic Zones Act, 2005 and the breach of conditions being procedural, we have no hesitation in setting aside ..... X X X X Extracts X X X X X X X X Extracts X X X X
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