The Ahmedabad Bench of Customs, Excise, and Service Tax Appellate Tribunal ( CESTAT ) ruled that the non-submission of A1/A2 certificates should not prevent the granting of service tax exemption for services provided to a Special Economic Zone ( SEZ ).
Geo Dyanamics, appellant-assessee, provided services to the SEZ, but the exemption was denied for not producing the A1/A2 certificate.
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The assessee’s counsel, argued that while the A1/A2 certificate was not submitted in some cases, the service provided to the SEZ was undisputed. He claimed that non-submission of the certificate was a procedural lapse and that the exemption should apply, citing Section 26(1)(e) of the SEZ Act and Rule 31 of the SEZ Rules. He relied on the Tribunal’s judgment in M/s Anjani Excavation Operation vs. Commissioner of Central Excise & ST, Bharuch, Final Order No. 11444/2023.
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A single member bench comprising Ramesh Nair (Judicial Member) noted that the only issue with the appellant was the non-submission of the A1/A2 certificate for the service provided to the SEZ, though the service itself was undisputed.
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It determined that this procedural lapse should not prevent the exemption from service tax, referencing the Tribunal’s decision in M/s Anjani Excavation Operation (Final Order No. 11444/2023). Furthermore, Section 26 of the SEZ Act exempts service tax on services received by the SEZ. As a result, the denial of the exemption was ruled as incorrect.
In short,the appeal filed by the assessee was allowed.
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