The Supreme Court upheld the order of the Customs Excise Service Tax Appellate Tribunal ( CESTAT ) wherein it was held that services relating to the supply of containers in the Special Economic Zone (SEZ) are exempt from payment of service tax.
The appeal arose out of the impugned final judgment and order passed by the Customs Excise Service Tax Appellate Tribunal ( CESTAT ) West Zonal Bench at Ahmedabad
The assessee, Arkay Logistics Ltd is engaged in providing various taxable services. A search by DGCEI revealed that the appellant was providing services of loading, supervision, weighing and inspection and inter-carting services for the raw materials and finished goods within the factory premises of M/s Essar Steel Ltd. (M/s ESL)
However, no service tax was paid by the Appellant on the services termed by them as inter-carting services provided to M/s. ESL with respect of raw – materials and finished goods. The revenue alleged that such services of inter-carting appeared to be classifiable under “Cargo Handling Services”. The assessee has also not paid service tax on inter-carting services provided to units located in SEZ.
The CESTAT held that exemption from service tax is available to services rendered to a unit in the SEZ for the authorised operations. The Tribunal viewed that the impugned services relating to the supply of containers in the SEZ are exempt from payment of Service tax.
A two-judge bench of Abhay S Oka and Ujjal Bhuyan while dismissing the appeal held that “We concur with the view taken by the Customs, Excise and Service Tax Appellate Tribunal. No case for interference has been made out.”
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