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TMI Blog2024 (11) TMI 405X X X X Extracts X X X X X X X X Extracts X X X X ..... be followed is incorrect. The main criteria for granting the exemption is that the service should be provided in the SEZ unit which is not under the dispute in the present case. Once this fact is established, then not only service is exempt under Notification No. 09/2009- ST dated 03.03.2009 but also not taxable in terms of the Section 51 read with Section 26 of the SEZ Act It is settled that when subcontractor provided the service on behalf of the main contractor in the SEZ, the same is exempted from payment of service tax. Thus, the appellant is not liable to pay service tax. - HON'BLE MEMBER ( JUDICIAL ) , MR. RAMESH NAIR And HON'BLE MEMBER ( TECHNICAL ) , MR. RAJU Shri Nimesh S Desai , Advocate for the Appellant Shri Tara Praksah , Deputy Commissioner ( AR ) for the Respondent ORDER RAMESH NAIR Issue involved in the present case is that whether the appellant being a subcontractor of main contractor provided services in the SEZ is liable to service tax or otherwise. 2. Shri Nimesh S Desai Learned Counsel appearing on behalf of the appellant at the outset submits that there is no dispute that the service was provided in the SEZ. The service tax demand was made on the gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contractor to contractors appointed by a Developer or Unit in the SEZ Act. In the present matter SEZ units appointed main contractors for carrying out work and main contractor appointed to Appellant as sub-contractor for carrying out works of SEZ units. Further in term of Notification No. 9/2009-ST dated 03.03.2009 service tax exemption is available to services received by the Developer of units of SEZ with approval from the approval committee. In the instant case appellant does not have any approval from the competent authority to provide the services to Developer or SEZ units. In terms of said Notification No. 9/2009 ST, as service provider who provides services to SEZ units or developers of SEZ, has to pay Service tax on services so provided on which service receiver i.e. SEZ units or developer of SEZ may claim refund. 12. We find that even though the sub-contractor provided the service as sub-contractor to the main contractor but it is not under dispute that the service was provided in the SEZ which prima-facie show that services were provided by the appellant as sub-contractor which was ultimately received by the SEZ developer or unit in SEZ. As per the decisions cited by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... blished, then not only service is exempt under Notification No. 09/2009- ST dated 03.03.2009 but also not taxable in terms of the Section 51 read with Section 26 of the SEZ Act. This issue has been considered time and again in the following judgments:- a) In the case of Intas Pharma Ltd (Supra) this Tribunal has given the following findings:- 7. We notice that the Special Economic Zones Act, 2005 (Central Act 28 of 2005) was enacted providing for SEZ within the territory of India and for providing inter alia immunities/exemptions from taxes/duties/cesses. Section 7 of the 2005 Act enjoins that any goods or services exported outside, or imported into, or procured from the domestic tariff area, by a unit in SEZ or a developer shall, subject to such terms and conditions and limitations, as may be prescribed be exempted from payment of taxes/duties/cesses under all enactments specified in the First Schedule. The First Schedule does not enumerate the Act (Finance Act, 1994) as among the enactments in respect of which exemption from taxes/duties or cesses is available under Section 7 of the 2005 Act. However, Section 26(1)(e) enacts that subject to the provisions of sub-section (2) there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x is operationalised. Notification Nos. 9/2009 and 15/2009 have provided a facilitative regime whereby a developer or units of SEZ, as recipients of taxable service are enabled the facility of claiming refund of Service Tax, remitted by taxable service providers in relation to the taxable services provided to a unit in a SEZ. On this harmonious construction, the immunity to Service Tax provided under Section 7 or 26 of the 2005 Act cannot be so interpreted as to be eclipsed the procedural prescriptions of Notification No. 9/2009 or 15/2009. These Notifications are calibrated to enable recipients of taxable services (exempt from liability to tax under the provisions of the 2005 Act), to claim refund of the Service Tax, wherever assessed and collected by Revenue or remitted otherwise by the taxable service provider, inadvertently. Considered in the light of this analysis, the substituted provisions, of clause/sub-paragraph c of Notification No. 15/2009 cannot be inferred to have imposed any disability on the recipient of services consumed wholly within the SEZ, from seeking refund of Service Tax remitted on such transactions, by the providers of such services. 12. Therefore, the reje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otifications 9/2009 and 15/2009 issued under Section 93(1) of the Act, considered in the light of overarching provisions of Section 7 and 26(e) of the 2005 Act, the conclusion appears compelling that neither Notification 9/2009 nor 15/2009 disentitle immunity to Service Tax enjoined by the provisions of the 2005 Act. It therefore appears that Notification Nos. 9/2009 and 15/2009 merely contour the process by which the benefit of exemption/immunity to tax is operationalized. Notification Nos. 9/2009 and 15/2009 have provided a facilitative regime whereby a developer or units of SEZ, as recipients of taxable service are enabled the facility of claiming refund of Service Tax, remitted by taxable service providers in relation to the taxable services provided to a unit in a SEZ. On this harmonious construction, the immunity to Service Tax provided under Section 7 or 26 of the 2005 Act cannot be so Interpreted as to be eclipsed the procedural prescriptions of Notification No. 9/2009 or 15/2009. These notifications are calibrated to enable recipients of taxable services (exempt from liability to tax under the provisions of the 2005 Act), to claim refund of the Service Tax, wherever assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also undisputed that appellant was a sub-contractor. On this factual matrix, we have to now consider the Notification No. 4/2004-S.T. which reads as under : Service tax exemption to services provided to a Developer or units of Special Economic Zone Notification No. 17/2002-S.T. superseded In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance and Company Affairs (Department of Revenue), No. 17/2002-Service Tax, dated 21-11-2002, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) dated 21-11-2002, vide, G.S.R 777(E), dated 21-11-2002, except as respects things done or omitted to be done before such supersession, the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts taxable service of any description as defined in clause (90) of sub-section (1) of section 65 of the said Act provided to a developer of Special Economic Zone or a unit (including a unit under construction) of Special Economic Zone by any service provider for consumption of the ser ..... 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