SEZ service tax exemption cannot be denied for delayed Form A1 filing when substantive conditions are satisfied.

Exemption from service tax for services supplied to an SEZ unit could not be denied merely because Form A1 was furnished late, where the services themselves were undisputed and the substantive notification conditions were ultimately met. The SEZ exemption under Section 26(1)(e) was treated as prevailing over the service tax levy framework, so the denial of exemption and consequent demand were unsustainable.

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Issues: Whether exemption from service tax under Notification No. 17/2011-ST dated 01.03.2011 could be denied solely because Form A1 was furnished belatedly, where services were admittedly provided to an SEZ unit.

Analysis: The services supplied to the SEZ unit were not in dispute. The only ground for denial was the non-availability of Form A1 at the time of provision of services. The form was later submitted, and the requirement under the notification was therefore treated as complied with. The exemption was also held to flow from Section 26(1)(e) of the Special Economic Zones Act, which prevails over the service tax levy under the Finance Act framework.

Conclusion: The denial of exemption was unsustainable, and the demand could not survive.

Final Conclusion: The assessee was held entitled to the service tax exemption in respect of services provided to the SEZ unit, and the appeal succeeded.

Ratio Decidendi: Exemption available for services rendered to an SEZ unit cannot be denied merely for delayed submission of Form A1 when the substantive conditions are satisfied and the governing SEZ exemption prevails over the service tax levy.

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