TaxTMI 
TaxTMI 
2024 (8) TMI 13
X X X X Extracts X X X X
X X X X Extracts X X X X
.... their activity as specified service in terms of Notification No. 09/2009-ST dated 03.03.2009 read with Notification No. 17/2011-ST dated 01.03.2011. The department formed an opinion that service of display of signage is properly classifiable under the category of sale of space or time for 'Advertisement Service' which is not a specified service for the authorised operation in SEZ, for the purpose of claiming exemption from payment of service tax in terms of the aforesaid notification. The department also observed that alleging nonpayment of service tax on signage income following earlier show cause notices have been issued to the appellant: S. No. SCN No./File No. Dated Period Involved Amount Involved O.I.O 1. 65/Audit/2013-14 15.10.2013 2007-08 to 2011-12 9,20,54,853/- 28.12.2015 2. 52/Div-I/2014-15 06.05.2014 2012-13 6,90,859/- 31.01.2017 3. 13/Div-I/2015 17.04.2015 2013-14 8,79,597/- 06.07.2023 2. For the impugned period of Financial Year 2014-15, the signage income received by the appellant is observed to be value of Rs.1,05,10,027/-. The payable service tax is Rs.12,99,039/-.&nbs....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t to signage income has also been dropped by this Tribunal in the appellant's own case titled as M/s. DLF Assets Pvt. Ltd. Vs. Commissioner of Service Tax, Delhi-I reported as 2020 (11) TMI 35-CESTAT New Delhi 4.1 Learned counsel further impressed upon that even reliance upon any of the notification is not relevant for seeking exemption from payment of service tax as the said exemption flows from the SEZ Act itself in terms of Section 26 of Special Economic Zone Act, 2005 (hereinafter referred as SEZ Act). Sub-clause 1(e) of Said Section 26 is impressed upon. The applicability of Notification 9/2009-ST is also redundant, in view of sub-section (2) of Section 26, according to which the exemption etc. has to be provided as per the manner prescribed by the Central Government and prescribed "in terms of Section 2 (w) of SEZ Act means prescribed by the rules made by Central Government under SEZ Act", hence reliance of the adjudicating authority below upon the notifications and the alleged non-compliance thereof for denying the tax exemption benefit to the appellant is not sustainable. Learned counsel has also submitted that the service of sale of space or time for a....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that the adjudicating authority have been quite judicious while arriving at the conclusion. There is no infirmity in the order under challenge which has upheld the aforesaid findings of Order-in-Original. With these submissions, the appeal is prayed to be dismissed. 6. Having heard the rival contentions and perusing the entire records, The question to be adjudicate in the impugned appeal is: "Whether appellant is entitled for tax exemption on signage income received while renting out space for the signages to the units in the SEZ area." 7. To adjudicate the issue, foremost we need to understand the concept of SEZ under SEZ Act. Section 51 of SEZ Act states that the provisions of this Act shall have effect notwithstanding anything inconsistent there with, contained in any other law for the time being in force or in any instrument having affect by virtue of any law other than this Act. According to Section 2(c), "authorized operations" means operations which may be authorized under subsection (2) of section 4 and sub-section (9) of section 15 of. For ease of reference, we reproduce these two sections below: 4. E....
X X X X Extracts X X X X
X X X X Extracts X X X X
....erson aggrieved by an order of the Approval Committee, made under sub-section (3), may prefer an appeal to the Board within such time as may be prescribed. (5) No appeal shall be admitted if it is preferred after the expiry of the time prescribed therefore: Provided that an appeal may be admitted after the expiry of the period prescribed therefore if the appellant satisfies the Board that he had sufficient cause for not preferring the appeal within theprescribed time. (6) Every appeal made under sub-section (4) shall be in such form and shall be accompanied by a copy of the order appealed against and by such fees as may be prescribed. (7) The procedure for disposing of an appeal shall be such as may be prescribed: Provided that before disposing of an appeal, the appellant shall be given a reasonable opportunity of being heard. (8) The Central Government may prescribe,- (a) the requirements (including the period for which a Unit may be set up) subject to which the Approval Committee shall approve, modify or reject any proposal referred to in sub- section (3); (b) the terms and conditions, subject to which the Unit ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ibed under the Rules framed under SEZ Act, i.e., under the SEZ Rules. To sum up, if a developer has to enjoy the exemptions available under section 26 of the SEZ Act, its operations should be authorised by the Board under Section 4 and it should meet the manner, terms and conditions laid down under the SEZ Rules. Similarly, if a unit located in the SEZ has to enjoy the exemptions available under Section 26; its operations must be authorised by the Development Commissioner under Section 9 and it should meet the manner, terms and conditions prescribed under the SEZ Rules. For exemption from the service tax, the concerned SEZ Rules are Rules 22 and 31. 9. We also observe that while the SEZ Act itself provides for exemption from service tax (as well as Central Excise duty and Customs duty), exemption notifications were also issued by the Government under the respective laws with some conditions. The exemption notifications in dispute in this case are service tax exemption notifications ST-40/2012 dated 20.06.2013 and ST12/2013 dated 01.07.2013. This duplication of exemption under the two provisions viz, SEZ Act and Rules and under exemption notifications under the Fin....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ce provider for the authorized operations in a Special Economic Zone. 11. Reliance in this regard is also placed on Norasia Container Lines Vs. CCE New Delhi reported as 2011 (23) STR 295 (Tri-Delhi), wherein it is held that it is clear from Section 26 and Rule 31 of the SEZ Act that there is no restriction regarding the consumption of the services and the exemption is extended to the services rendered to a unit in the SEZ for the purpose of authorized operations in the SEZ. In the case of Reliance Ports and Terminals Limited Vs. CCE, Rajkot, 2013-TIOL-1473-CESTATAHM, This Tribunal negated the view of the department and held that there was no requirement to pay service tax and then claim refund since the SEZ Act itself provides for complete exemption and the notification is merely a means to operationalize that scheme. The relevant portion of the decision is extracted herein in below: 7. From the provisions contained in Section 26 (1)(e) of the SEZ Act, read with Rule 30 (10) of the SEZ Rules, 2006, it can be seen that no service tax is payable on the services provided by a service provider to a SEZ unit. Further, Sec. 51 of the SEZ Act als....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and the provisions of the Rules Rules, the former will prevail. However, every effort should be made to give an interpretation to the Rules to uphold its validity. This can only be possible if the rules can be interpreted in a manner as to be in conformity with the provisions in the Act, which can be done by giving it an interpretation which may be different from the interpretation which the rule could have if it was construed independently of the provisions in the Act. In other words, to uphold the validity of the rule sometimes a strained meaning can be given to it, which may depart from the ordinary meaning, if that is necessary to make the rule in conformity with the provisions of the Act. This is because it is a well settled principle of interpretation that if there two interpretations possible of a rule, one of which would uphold its validity while the other which would invalidate it, the former should be preferred." The above decision has also been followed in catena of decisions one of which is New Holland Tractors India Pvt. Ltd. V. Commr. Of C. Ex. Reported as 2010 (253) ELT 249 (Tri-Del.) 13. Otherwise also, the provisions of SEZ Act have the overriding effect in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... a special law for SEZ transactions and has to be preferred over the Finance Act. The specific paragraph for the said decision is as follows: 8. Thus, the Act is a special Act relating to a matter of passport, whereas Section 104 of the Cr.P.C. authorizes the Court to impound document or thing produced before it. Where there is a special Act dealing with specific subject, resort should be had to that Act instead of general Act providing for the matter connected with the specific Act. As the Passports Act is a special act, the rule that "general provision should yield to the specific provision" is to be applied. See: Dam Vaiaji Shah and Anr. v. Life Corporation of India and Ors. AIR 1966 SC 1351; Gobind Sugar Mills Ltd. v. State of Bihar and Ors. MANU/SC/0486/1999; and Belsund Sugar Co. Ltd. v. State of Bihar and Ors. MANU/SC/0457/1999 9. The Act being a specific Act whereas Section 104 of Cr.P.C. is a general provision for impounding any document or thing, it shall prevail over that Section in the Cr.P.C. as regards the passport. Thus, by necessary implication, the power of Court to impound any document or thing produced before it would exclude passpor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....roposing demand of Rs.12,99,039 for the subsequent period i.e. 2014-15 on the signage charges under Section 73(1A) of the Act starting that the allegations as raised in the previous show cause notice shall remain same for this show cause notice. Once it has already been held in appellant's own case reported at DLF Assets Pvt. Ltd. Vs. The Commissioner, Service Tax, Delhi-I 2020 (11) TMI 35-CESTAT New Delhi and DLF Assets Pvt. Ltd. Vs. Principal Commissioner of GST, Delhi North 2023 (7) TMI 881- CESTAT New Delhi wherein in light of the overriding effect of provisions of the SEZ Act it has been held that, since the space given to SEZ units for displaying their name for identification purpose, for which the appellant charged signage charges, are undisputedly used by such SEZ units for their authorized operations, such activity of renting out space for display of name would be exempt from payment of service tax under the SEZ Act. The issued of overriding effect of provisions of the SEZ Act, particularly over the inconsistent notification issued under the Act, is no longer res-integra and stands settled in favour of the assesses, inter alia. 17. Irrespective appella....