Custom, Excise & Service Tax Tribunal
Rishabh Construction Co vs Vadodara-Ii on 11 October, 2023
Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench at Ahmedabad
REGIONAL BENCH- COURT NO.3
Service Tax Appeal No. 12660 of 2014 -DB
(Arising out of OIA-VAD-EXCUS-002-APP-97-14-15 dated 12/05/2014 passed by
Commissioner of Central Excise, Customs and Service Tax-VADODARA-II)
Rishabh Construction Co ........Appellant
A-12, Omkar Society,
Ajwa Road,
Vadodara , Gujarat
VERSUS
C.C.E. & S.T.-Vadodara-ii .........Respondent
1st Floor... Room No.101, New Central Excise Building, Vadodara, Gujarat - 390023 APPEARANCE:
Shri D R Bhatt, Chartered Accountant for the Appellant Shri Rajesh R Kurup, Superintendent (AR) for the Respondent CORAM: HON'BLE MEMBER (JUDICIAL), MR. RAMESH NAIR HON'BLE MEMBER (TECHNICAL), MR. C.L MAHAR Final Order No. A/ 12254 /2023 DATE OF HEARING: 24.08.2023 DATE OF DECISION: 11.10.2023 RAMESH NAIR The issue involved in the present case is that whether the appellant acted as sub-contractor of the main contractor M/s. Khurana Construction provided the service in the SEZ to Suzlon Infrastructure Ltd is eligible for exemption Notification No. 04/2004-ST dated 31.03.2004 or otherwise.
2. Shri Parth Rachchh, learned Counsel along with Shri Amal Dave, Learned Advocate appearing on behalf of the Appellant submits that the appellant had provided services in the SEZ unit to M/s. Suzlon Infrastructure Ltd even though as a sub - contractor of main contractor M/s. Khurana Construction, the services was undisputedly provided in the SEZ therefore, the appellant are eligible for exemption for payment of service tax. This issue has been decided in various judgments relied upon as under:-
2|Page ST/12660/2014 -DB Commissioner of Service Tax, Mumbai -I Vs. M/s. FEDCO Paints and Contracts - 2017 (3) GSTL 364 (Tri. Mumbai) Commissioner vs. M/s. FEDCO Paints and Contracts - 2018 (10) GSTL J2017 (SC) M/s. Sujana Metal Products Ltd vs. Commissioner of Central Excise, Hyderabad - 2011 (273) ELT 112 (Tri. Chennai) M/s. Vision Pro Event Management vs. Commissioner of Central Excise & Service Tax, Chennai - 2019 (365) ELT 555 (Tri.- Chennai) M/s. Metlife Global Operations Support Center (P.) Ltd vs. Commissioner, Service Tax, New Delhi- 2021 (46) GSTK 418 (Tri.Del) Sudhir Chand Jain vs. Commissioner of Central Excise, Ghaziabad -
2018 (8) GSTL 302 (Tri.All) M/s. Hindustan Dorr-Oliver Ltd and Another vs. Union of India and others - 1989 (9) TMI 355- Patna High Court.
3. Shri Prashant Tripathi, Learned Superintendent (AR) appearing on behalf of the Revenue reiterates the finding of the impugned order. He also placed reliance on the decision of this Tribunal in the case of National Building Construction Corporation Ltd vs. CCE & ST, PATNA - 2011 (23) STR 593 (Tri. - Kolkata)
4. We have carefully considered the submission made by both sides and perused the records. We find that the Revenue has denied the exemption to the appellant on the ground that the appellant being sub- contractor provided the service not to the SEZ but to the main contractor i.e. M/s.
Khurana Construction, therefore, they are liable to pay the service tax. We find that even though the service was provided by the appellant on the behest of the main contractor M/s. Khurana Construction but there is no dispute that the service was provided in relation to various operations of the SEZ and the services was undisputedly consumed in the SEZ therefore, the appellant has provided the service in SEZ. Accordingly, they are eligible for
3|Page ST/12660/2014 -DB exemption Notification No. 04/2004-ST dated 31.03.2004. This issue is no longer res-integra as the same has been decided in various decision of the Tribunal cited by the learned counsel. Some of the judgments are reproduced below:-
Commissioner of Service Tax, Mumbai -I Vs. M/s. FEDCO Paints and Contracts - 2017 (3) GSTL 364 (Tri. Mumbai)
"5. After hearing both the sides, we find that the main ground of the appeal of the Revenue is that the respondent had never provided services directly to the SEZ unit but was contracted as a sub- contractor to provide services to a unit in SEZ. Hence, the benefit of Notification No. 4/2004-S.T. is not applicable. It is undisputed that during the period 1-4-2005 to 31-3-2009 the respondent had rendered various services to the unit situated in SEZ and being developed by the SEZ developer. It is also undisputed that appellant was a sub-contractor. On this factual matrix, we have to now consider the Notification No. 4/2004-S.T. which reads as under :
"Service tax exemption to services provided to a Developer or units of Special Economic Zone -- Notification No. 17/2002-S.T. superseded In exercise of the powers conferred by sub-section (1) of section 93 of the Finance Act, 1994 (32 of 1994) and in supersession of the notification of the Government of India in the erstwhile Ministry of Finance and Company Affairs (Department of Revenue), No. 17/2002-Service Tax, dated 21-11-2002, published in the Gazette of India, Extraordinary, Part II, Section 3, Sub-section (i) dated 21- 11-2002, vide, G.S.R 777(E), dated 21-11-2002, except as respects things done or omitted to be done before such supersession, the Central Government being satisfied that it is necessary in the public interest so to do, hereby exempts taxable service of any description as defined in clause (90) of sub-section (1) of section 65 of the said Act provided to a developer of Special Economic Zone or a unit (including a unit under construction) of Special Economic Zone by any service provider for consumption of the services within such Special Economic Zone, from the whole of service tax leviable thereon under section 66 of the said Act, subject to the following conditions, namely:-
(i) the developer has been approved by the Board of Approvals to develop, operate and maintain the Special Economic Zone;
(ii) the unit of the Special Economic Zone has been approved by the Development Commissioner or Board of Approvals, as the case may be, to establish the unit in the Special Economic Zone;
(iii) the developer or unit of a Special Economic Zone shall maintain proper account of receipt and utilisation of the said taxable services.
4|Page ST/12660/2014 -DB Explanation. - For the purposes of this notification, -
(1) "Board of Approvals" means the combined Board of Approvals for export oriented unit and Special Economic Zone units, as notified in the Official Gazette, from time to time by the Government of India in the Ministry of Commerce and Industry;
(2) "developer" means a person engaged in development or operation or maintenance of Special Economic Zone, and also includes any person authorised for such purpose by any such developer;
(3) "Special Economic Zone" means a zone specified as Special Economic Zone by the Central Government in the notification issued under clause (iii) of Explanation 2 to the proviso to sub-section (1) of section 3 of the Central Excise Act, 1944 (1 of 1944)."
6. It can be seen from the above reproduced notification that the said notification exempts any taxable service provided by any service provider for consumption of the service within a Special Economic Zone, subject to following/adhering to the conditions. It is also undisputed that all the conditions mentioned in the notifications are satisfied by the SEZ developer i.e. M/s. Reliance Industries Ltd. On the face of such factual matrix, we find that the adjudicating authority was correct in coming to the conclusion that the proceedings initiated by show cause notice issued needs to be dropped. We also find as regards taxability of the service rendered to the SEZ developer was in dispute before this Tribunal in the case of Sujana Metal Products Ltd. v. Commissioner of Central Excise - 2011 (273) E.L.T. 112 (Tri.-Bang.) and this Tribunal came to a conclusion that where the services are rendered to SEZ or a unit in SEZ, as long as it is rendered for consumption in a Special Economic Zone, the services are exempt. We also note that the provisions of Section 26 of the Special Economic Zone overrides provisions of other law and exempts any services or taxes if the same are consumed in Special Economic Zone.
7. In view of the foregoing and the authoritative judicial pronouncement, we find no merits in the appeal filed by the Revenue and the same stands rejected and hold impugned order is correct and legal and does not require any interference. cross-objection is also disposed of."
Sudhir Chand Jain vs. Commissioner of Central Excise, Ghaziabad -
2018 (8) GSTL 302 (Tri.All) "6. Having considered the rival contentions I hold that the appellant as sub-contractor have provided service through their contractor M/s. Anurag Enterprises for construction of SDF, Block L at NSEZ for to the Deputy Commissioner of the SEZ. This proposition has been affirmed by the Hon'ble Supreme Court in the case of Imagic Creative and also by Hon'ble Patna High Court in the case of Hindustan Dorr Oliver Ltd. v. State of Bihar. Further, I find that the approval should
5|Page ST/12660/2014 -DB be either by the Deputy Commissioner and/or Board of Approvals as the case case may be. Here, admittedly the work order has been issued by Deputy Commissioner, SEZ. Hence it amounts to providing and consuming service to SEZ and/or allotted through NBCC, as the operating agency to the appellant with regard to other demand of Service Tax which already stands paid along with interest before SCN and not being contested by the appellant as regard taxability. Thus, there is ipso facto approval of the Deputy Commissioner of the SEZ. Thus, I hold that no further approval of the Approval Committee is required under the facts and circumstances. Accordingly, the appeal is allowed and the demand of Rs. 17,51,124/- is set aside. I also find that there is no suppression of facts or contumacious conduct on the part of the appellant. Accordingly, the penalty under Section 78 & Section 77 of the Finance Act, 1994 is also set aside. The appellant will be entitled to consequential benefits, if any, in accordance with law."
4.1 In view of the above judgments, it is settled that the service of sub-
contractor provided in SEZ shall be eligible for exemption under Notification No. 04/2004-ST and other identical notifications.
5. Accordingly, the impugned order is not sustainable, hence, the same is set aside. Appeal is allowed.
(Pronounced in the open court on 11.10.2023) RAMESH NAIR MEMBER (JUDICIAL) C.L MAHAR MEMBER (TECHNICAL) geeta