2018 (7) TMI 174 – CESTAT CHENNAI – TMI – Services provided to a SEZ unit for services consumed within SEZ unit – interpretation of statute – services as cab Operator to IT/ITES SEZ companies by way of picking and dropping the employees – benefit of N/N. 4/2004 cit. 31.03.2004 – SCN alleges that the services have not been consumed within the SEZ unit.
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Held that:- The words 'in a SEZ' used in the said Rule has led to doubts as to whether services which are partly availed outside the SEZ like that of tour operator service/ Rent -a-cab service used for picking up and dropping employees are eligible for exemption from service tax – When the service is ultimately consumed within the SEZ unit, whether services commenced outside the unit /or ended outside unit is of no consequence. When in effect the services are consumed within SEZ, the benefit of notification cannot be denied.
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Further by virtue of Section 51 of the SEZ Act, the provisions of the SEZ Act, has overriding effect o
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ed the proposals. In appeal, the Commissioner (Appeals) set aside the demand, interest and penalties. Hence Revenue is now before the Tribunal. 2. On behalf of appellant/Revenue the Ld. AR Sh. K.P. Muraleedharan reiterated the finding in the impugned order. None appeared for the respondent. The matter was taken up for disposal after hearing the AR and perusal of records. 3. The main allegation is that respondents are not eligible for exemption of notification 4/2004. This notification provides for exemption of service tax for the services provided to a SEZ unit for services consumed within SEZ unit. The Show Cause Notice alleges that the services have not been consumed within the SEZ unit. The Commissioner (Appeals) in para 5.2 of the impugned order has discussed the intention of the notification granting exemption to SEZ units. The relevant portion of the impugned order is reproduced as under :- 5.2 It is seen that the SEZs are specifically delineated duty free enclave and shall be de
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t disputed the fact of utilization of services of Tour Operator Services by the SEZ units. If that be the case, then it clearly amounts to consumption of services within SEZ. 5.3 Further, it is also seen that the SEZ Act has an overriding effect by virtue of Section 51 which provides that Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument have effect by virtue of any law other than this Act In view of this specific provision, if the appellant is held ineligible for availing Notification No. 4/2004 ST, considering its wordings i.e. consumption of services within SEZ, it could be treated as inconsistent notification. 5.4 In this era of liberalized economy and single window clearances to industry, it would definitely not be the intention of the Government to deny certain benefit available under a Notification issued under on Act on the one hand and to extent benefit under different provisions fo
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06 laid down that exemption from payment of service tax shall be available for the authorized operations in a SEZ The words 'in a SEZ' used in the said Rule has led to doubts as to whether services which are partly availed outside the SEZ like that of tour operator service/ Rent -a-cab service used for picking up and dropping employees are eligible for exemption from service tax. Other service like courier services, telephone services, internet will all fall in such category where part of the service may be availed outside the SEZ. When the service is ultimately consumed within the SEZ unit, whether services commenced outside the unit /or ended outside unit is of no consequence. When in effect the services are consumed within SEZ, the benefit of notification cannot be denied. Further by virtue of Section 51 of the SEZ Act, the provisions of the SEZ Act, has overriding effect over the provisions contained in any other law. The said Act has come into force on 10.02.2006. Thus Sec
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