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ST – Services provided to SEZ unit is exempted: CESTAT

2019-TIOL-2422-CESTAT-CHD

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGINAL BENCH, CHANDIGARH
COURT NO. I

Appeal No. ST/55232/2013-Cus-(DB)

Arising out of OIO No.09/S.Tax/D-I/2012, Dated: 26.09.2012
Passed by the Commissioner, Central Excise, Delhi-I, C.R. Building, I.P. Estate, New Delhi

Date of Hearing: 22.05.2019
Date of Decision: 22.05.2019

M/s DLF PROJECTS LTD
(3RD FLOOR, SHOPPING MALL, ARUN MARG DLF CITY, PHASE-1
DLF QUTAB ENCLAVE, GURGAON)

Vs

COMMISSIONER OF SERVICE TAX
IAEA HOUSE, IP ESTATE, M G MARG
NEW DELHI

Appellant Rep by: Shri P K Mital, Adv.
Respondent Rep by:
 Shri Atul Handa & Vijay Gupta, AR

CORAM: Ashok Jindal, Member (J)
Bijay Kumar, Member (T)

ST – The assessee provided various services to the unit located in SEZ during the period from 3.3.2009 to 20.5.2009 under the category of works contract services but did not pay service tax – The Revenue views that the assessee is liable to pay service tax in terms of Notfn 9/2009-ST – Demand of service tax was confirmed along with interest – As the assessee has provided services to SEZ unit and in terms of section 26 of SEZ, 2005, the assessee was not required to pay service tax – Accordingly, in terms of Notfn 9/2009, the assessee is not required to pay service tax – Therefore, the demand of service tax raised against the assessee is set aside: CESTAT

Appeal allowed

Case law cited:

Dlf Projects Ltd – 2018-TIOL-1916-CESTAT-CHD…Para 3

FINAL ORDER NO. 60587/2019

Per: Ashok Jindal:

The appellant is in appeal against the impugned order demanding service tax on the services provided by them.

2. The facts of the case are that the appellant provided various services to the unit located in special economic zone during the period from 3.3.2009 to 20.5.2009 under the category of works contract services but did not pay service tax. The Revenue is of the view that the appellant is liable to pay service tax in terms of Notification No.9/2009-ST dt.3.3.2009. In these sets of fact, a show cause notice was issued to the appellant, the matter was adjudicated and demand of service tax was confirmed along with interest. Against the said order, the appellant is before us.

3. Ld. Counsel for the appellant submits that the appellant has provided services to the SEZ unit, therefore, they are not liable to pay service tax as held by this Tribunal in the case of Nokia India Pvt.Ltd.-MANU/CC/0262/2016. He also relied upon the decision of this Tribunal in the case of Insta Pharma Limited MANU/CS/0128/2013. Therefore, he prayed that the appellant is not liable to pay service. He also relied on the decision in their own case decided by this Tribunal vide Final Order No.62376/2018 dt.22.3.2018 = 2018-TIOL-1916-CESTAT-CHD.

4. On the other hand, Ld. AR submits that in terms of Notification NO.9/2009-ST dt.3.3.2009, the procedure laid down deals with situation services supplied to SEZ unit which prescribed the assessee is liable to pay service tax. Therefore, the appellant is liable to pay service.

5. Heard the parties and considered the submissions.

6. We find that in this case, the issue is whether the appellant is liable to pay service tax has been examined by this Tribunal in the case of Insta Pharma Limited (supra) wherein this Tribunal has observed as under:-

“………….On this harmonious construction, the impunity to service tax provided under section 7 to 26 of the Act 2005 cannot be eclipsed by the procedural by prescriptions of Notification No.9/2009 or 15/2009. These notifications are calibrated to enable recipients of taxable services which are exempt from the liability to tax under the provisions of the 2005 Act, to claim refund of the service tax, whatever whether assessed and collected by Revenue or remitted by the service provider inadvertently. Considered in the light of this analysis, the substituted provisions, of clause/subparagraph c of Notification No.15/2009 cannot be inferred to have imposed any disability on the recipient of services in respect of taxable services consumed wholly within the SEZ, from seeking refund of service tax remitted on such transactions.”

7. Further, in the case of Nokia India Pvt.Ltd.(supra), this Tribunal has observed as under:-

“…………..On this harmonious construction, the impunity to service tax provided under section 7 to 26 of the Act 2005 cannot be so interpreted as to be eclipsed the procedural by prescriptions of Notification No.9/2009 or 15/2009: MANU/DSTX/2009. These notifications are calibrated to enable recipients of taxable services (exempt from the 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 service provider, inadvertently. Considered in the light of this analysis, the substituted provisions, of clause/sub-paragraph c of Notification No.15/2009: MANU/DSTX/0034/2009 cannot be inferred to have imposed any disability on the recipient of services in respect of taxable services consumed wholly within the SEZ, from seeking refund of service tax remitted on such transactions, by the providers of such services.”

8. Therefore, we hold as the appellant has provided services to SEZ unit and in terms of section 26 of Special Economic Zone, 2005, the appellant was not required to pay service tax. Accordingly, in terms of Notification No.9/2009 dt.3.3.2009, the appellant is not required to pay service tax. Therefore, the demand of service tax raised against the appellant is set aside.

9. With these terms, the appeal is allowed with consequential relief, if any.

(operative part of order was pronounced in the court)

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