TaxTMI 
TaxTMI 
2026 (8) TMI 1073
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.... the said Notification specifically provides exemption to the services which are provided in relation to the authorized operations in a Special Economic Zone, and received by a developer or units of a Special Economic Zone; whereas in the present case the services have been provided by a sub-contractor to contractor and not directly to Developer or units of Special Economic Zone? (ii) Further, whether the Hon'ble CESTAT is correct in holding that the exemption is available to the Services provided to a Unit in the Special Economic Zone by sub-contractor, whereas second proviso to Rule 10 of the SEZ, Rules, 2006 w.e.f. 03.02.2009, allows exemption of services provided by a contractor / sub-contractor, provided only to Developer or Co-Developer of Special Economic Zone and not to Unit in Special Economic Zone? (iii) Whether the Hon'ble CESTAT is correct in allowing the appeal by holding that exemption is available to Respondent particularly after the issuance of Notification Nos. 17/2011-ST dated 01.03.2011 & 12/2013-ST dated 01.07.2013, wherein it is statutory requirement for Respondent to submit Forms A-1 A-duly verified by the Specified Officer of SEZ and....
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....ervices provided by main contractor and received by a developer or units of SEZ, as approval from the Approval Committee was provided for the contractor, to whom the contract for services have been entered into by developer or SEZ Unit and not to the sub-contractor. It was also contended that the requirement of furnishing a declaration in Form A-1 was introduced by amendment in Notification No. 9/2009-ST in amendment No.17/2011 whereas, the demand raised in the case of the assessee was for the period prior to March, 2011 and the same is not sustainable in absence of any requirement of making declaration made in Form A-1 by the assessee prior to such amendment. 3.5. It was also contended by the assessee that as per the provisions of Section 26 of the SEZ Act, all activities and services rendered in SEZ area for SEZ developer or SEZ unit are exempted from service tax. 3.6. The CESTAT after considering the submissions of the parties allowed the Appeal in favour of the assessee relying upon the decision of the Co-ordinate Bench of the Tribunal in case of and Rishabh Construction Company reported in 2023 (10) TMI 596-CESTAT M/s. Shyam Engineers in Final Order No. 12201/2023 dated ....
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....rom levy of Service Tax on the taxable services when provided by a sub-contractor to the Contractor of a SEZ Unit, Further, levy of service tax is by virtue of the Finance Act, 1994 and no levy can be imposed by way of instructions/circular by the Board this regard, the recent decision of Hon. Tribunal in the case of M/s. Sew Construction Ltd. Vs. CCE, Raipur-2011(22) STR 666 (Tri.-Del) is most relevant. It was held by the CESTAT that- "5. We do not find any provision in the Finance Act, 1994 to grant immunity to the subcontractor from levy of service tax when undisputedly taxable services were provided by them. No evidence was before us to notice whether the service provided by the subcontractor to the contractor was ever been taxed. We noticed that para 9 of the Larger Bench decision in the case of M/s. Vijay Sharma & Co. cited by the learned AR clearly speaks that a sub-contractor shall not be immune from service tax under Finance Act, 1994. The said para 9 is reproduced below for appreciation. In view of the foregoing discussion, it is clear that even when service is provided in the category of sub-contractor, he is liable to pay service tax. This vie....
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....conomic Zone claiming the exemption has actually paid the service tax on the specific services; (e) no CENVAT credit of service tax paid on the specified services used in relation to the authorised operations in the Spe Economic Zone has been taken under the CENVAT Credit Rules, 2004; (f) exemption or refund of service tax paid on the specified services used in relation to the authorised operations in the Special Economic Zone shall not be claimed except under this notification." 9. The exemption contained in the aforesaid Notification is subject to the conditions specified in Clause-2 of the said Notification, which read as under: "2. The exemption contained in this notification shall be subject to the following conditions, namely:- (a) the person liable to pay service tax under sub-section (1) or sub-section (2) of section 68 of the said Finance Act shall pay service tax as applicable on the specified services provided to the developer or units of Special Economic Zone and used in relation to the authorised operations in the Special Economic Zone, and such person shall not be eligible to claim exemption for the specified services: P....
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....ner of Central Excise, as the case maybe, shall, after satisfying himself that the said services have been actually used in relation to the authorised operations in the Special Economic Zone, refund the service tax paid on the specified services used in relation to the authorised operations in the Special Economic Zone; (i) where any refund of service tax paid on specified services is erroneously refunded for any reasons whatsoever, such service tax refunded shall be recoverable under the provisions of the said Finance Act and the rules made thereunder, as if it is a recovery of service tax erroneously refunded." 10. Therefore, on perusal of the Notification No. 9/2009-ST, it appears that the exemption from payment of service tax is granted to the taxable services specified in Clause (105) of Section 65 of the Finance Act, 1994, which are provided in relation to the authorised operations in the SEZ. It is not in dispute that the assessee has provided the taxable services to the SEZ Unit, and the assessee has also not violated any condition stipulated in the said Notification. The requirement of submission of Form A-1 is introduced vide amendment as per the Notification ....