SEZ service tax exemption cannot be denied merely for later Forms A1 and A2 when substantive eligibility is met.

Erection, commissioning and installation services supplied to SEZ units were treated as eligible for exemption, and the procedural omission to furnish Forms A1 and A2 for the relevant period did not defeat that substantive benefit. The exemption notifications were read in line with the jurisdictional High Court view that insistence on later-produced forms cannot override the tax exemption available for services actually provided to SEZ units, a position affirmed by the Supreme Court. On that basis, later issuance of the forms did not justify denial of exemption for the earlier period, and the service tax demand was held unsustainable.

---

---

Issues: Whether the demand of service tax on erection, commissioning and installation services supplied to SEZ units could be sustained for non-furnishing of Forms A1 and A2 during the relevant period, despite the forms being issued later.

Analysis: The respondent had rendered services to SEZ units, and the dispute centered only on the procedural requirement of furnishing Forms A1 and A2 under the exemption notifications governing services provided to SEZ units. The relevant notifications were examined in the light of the jurisdictional High Court decision, which held that insistence on such forms could not defeat the exemption where the substantive benefit related to services supplied to SEZ units. The same view had been affirmed by the Supreme Court, and the later issuance of the forms did not provide a legal basis to deny the exemption for the earlier period.

Conclusion: The demand was not sustainable on the ground of non-furnishing of Forms A1 and A2, and the appeal by the Department failed.

---