CESTAT grants service tax exemption for technical assistance services to UNICEF under Notification 16/2002-ST

CESTAT Allahabad allowed the appeal challenging service tax demand on technical assistance services provided to UNICEF. The appellant had entered into long-term agreements for financial, human resource, and logistics management services across various Indian states. The original authority denied exemption under Notification No.16/2002-ST, claiming UNICEF was not specifically mentioned. However, CESTAT held that UNICEF is covered under the exemption notification, citing consistent tribunal precedents. The tribunal also granted exemption under Notification No.25/2012-ST for the period from July 2012 onwards, being pari-materia with the earlier notification. The impugned order was set aside and service tax demand was quashed.

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Issues Involved:
The issues involved in the judgment are whether the services provided to UNICEF are eligible for exemption under Notification No.16/2002-ST and Notification No.25/2012-ST, and whether the Appellant is liable to pay service tax for the disputed period.

Comprehensive details of the judgment for each issue involved:

1. Exemption under Notification No.16/2002-ST and Notification No.25/2012-ST:
The Appellant, engaged in various services, entered into Long Term Agreements with UNICEF. The department alleged that the Appellant is not eligible for exemption under entry no. 1 of Mega Exemption Notification No. 25/2012-ST for services provided to UNICEF. The Appellant argued that UNICEF can be considered a "United Nations" or "Specified International Organisation" based on legal interpretations and agreements. The Tribunal noted that services provided to UNICEF are covered by exemption Notification No.16/2002-ST and Notification No.25/2012-ST. Citing judicial precedents, the Tribunal held that the Appellant is entitled to the exemption for services provided to UNICEF.

2. Liability for Service Tax:
The department issued a Subsequent Show Cause Notice proposing a service tax demand for the disputed period. The Appellant contended that services provided to UNICEF are exempted from service tax. The Learned Commissioner confirmed the demand, but the Appellant appealed to the Tribunal. The Tribunal, considering the legal interpretations and previous judgments, set aside the impugned order and allowed the appeal, providing consequential relief to the Appellant.

In conclusion, the Tribunal ruled in favor of the Appellant, holding that the services provided to UNICEF are eligible for exemption under the relevant notifications, and the Appellant is not liable to pay service tax for the disputed period.

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