SEZ service tax exemption cannot be denied for missing A1/A2 certificates when service to the unit is undisputed.

Exemption from service tax could not be denied merely because A1/A2 certificates were not produced where the services rendered to an SEZ unit were otherwise undisputed. Non-production of those certificates was treated as a procedural lapse, and the benefit of exemption could not be refused on that basis. Reliance on section 26 of the Special Economic Zones Act, 2005 and rule 31 of the Special Economic Zones Rules, 2006 supported the view that no service tax was payable on services received by the SEZ unit, so the denial of exemption was unsustainable.

---

---

Issues: Whether exemption from service tax could be denied merely because A1/A2 certificates were not produced for services admittedly provided to an SEZ unit.

Analysis: The only defect found was non-production of A1/A2 certificates. The service rendered to the SEZ unit was not in dispute. Such non-production was treated as a procedural lapse, and the benefit of exemption could not be denied on that ground. Section 26 of the Special Economic Zones Act, 2005 and Rule 31 of the Special Economic Zones Rules, 2006 were relied upon to hold that no service tax was payable on services received by the SEZ.

Conclusion: The denial of exemption was held to be unsustainable, and the assessee was held entitled to the exemption.

---