SEZ service tax exemption upheld on services to SEZ unit during specified period.

The Tribunal allowed the appeal filed by the appellant, determining that no service tax was payable on services provided to a SEZ unit during the specified period, in accordance with the provisions of the SEZ Act, 2005. The Tribunal emphasized that the notifications issued were to operationalize the exemption available under the SEZ Act, 2005, ultimately ruling in favor of the appellant.

---

---

Issues involved:
Whether service of man-power supply provided by the appellant to a unit situated in SEZ was exempted from payment service tax for a specific period due to an amendment in the relevant notification.

Analysis:
The appellant appealed against an order dated 19/09/2011 regarding the payment of service tax for providing man-power supply to a unit in SEZ. The main issue was whether the appellant was exempt from service tax during the period from 03/03/2005 to 20/05/2005. The appellant argued that they were always exempt from service tax under Sec. 26(1)(e) of the SEZ Act, 2005. They cited judgments like M/s. Intas Pharma Ltd. and Tata Consultancy Services Ltd. to support their claim of exemption during the mentioned period. The appellant contended that the demand was time-barred as they had mentioned duty-free service in their ST-3 returns and invoices, clearly indicating exemption under SEZ Act provisions.

The Revenue, represented by Shri K. Sivakumar, supported the adjudicating authority's decision. The Tribunal analyzed the issue in detail, focusing on whether the service provider was entitled to exemption from service tax for services provided inside SEZ. The Tribunal referred to Notification No.15/2009-ST and the amendment in para 1 of Notification No.9/2009-ST, which provided exemption to service providers for services inside SEZ. The Tribunal also considered the judgment in the case of Tata Consultancy Services Ltd. v. CCE & ST (LTU) Mumbai, stating that service providers were entitled to a refund if they paid duty despite not being required to. The Tribunal cited the case of Sujana Metal Products Ltd. v. CCE, Hyderabad, where it was held that no service tax liability existed for services supplied to SEZ.

The Tribunal further referenced the judgment in Intas Pharma Ltd. v. CST, Ahmedabad, highlighting the provisions of SEZ Act, 2005, and the operationalization of exemptions under Notification No.9/2009-ST and No.15/2009-ST. The Tribunal emphasized the provisions of Sec. 26(1)(e) and Sec. 51 of the SEZ Act, 2005, which exempted service tax on services provided to a SEZ unit and stated that the SEZ Act's provisions override any inconsistent laws. Consequently, the Tribunal held that the notifications were issued to operationalize the exemption available under the SEZ Act, 2005.

In conclusion, the Tribunal allowed the appeal filed by the appellant based on the findings that no service tax was payable on services provided to a SEZ unit, as per the relevant provisions of the SEZ Act, 2005.

---