[ORDER PER: ANGAD PRASAD]

1. M/s Merit Infrastructures (hereinafter referred to as appellant) are in appeal against order of the Commissioner (Appeals), dated 28.11.2017 (impugned order) whereby, the order of the Original Authority had confirmed the demand.

2. The brief fact of the case is that the appellant’s are engaged in provision of service relating to Commercial or Industrial Construction Service as well as Works Contract Service. Based on certain records of the appellant, Department noticed that they were provided certain service to developers as well as units in the special economic zone in contravened of the conditions of exemption provided in Notification No. 9/2009-ST dated 03.03.2009, 17/2011-ST dated 01.03.2011, 40/2011-DT dated 20.06.2012 and 12/2013- ST dated 01.07.2013. Therefore, a demand of rupees 63,22,249/- was made out for the services provided to SEZ Developers and also short payment of rupees 2,37,449/- in respect of services provide to non SEZ Units i.e., M/s GVPR. The Adjudicating Authority, inter alia, took into account that the notifications claimed were conditional which had to be fulfilled to become eligible for claiming exemption and the lapses could not be issued as their procedure infirmity and it was an admitted fact that they had not issued invoices to the customers and that the payments were received from customer on the basis of work done and recorded in their measurements books. The exemptions were denied as the appellant’s were not imposition of any document in support of the exemptions claimed.

3. On appeal that the appellant submitted that they provided services to SEZ Units namely M/s Hetero Labs Ltd., M/s Hetero Infrastructure Ltd., and they could not form A1 and A2 for the taxable services provided services as same were not provided by the SEZ Units. He also submitted that he is not came in Service Tax amount on invoice raised by him to M/s Hetero Labs the Commissioner (Appeals), vide impugned order, inter alia, observe that the notification claimed to require that to fulfil the conditions of the notification and non production thereof cannot treated as mere procedural infirmity. In so far as the short payment was concerned, he held that he had not given any specific findings.

4. Learned Advocate submits that it is not that they have provided service to SEZ Units/Developers. However, they were not able to produce certain documents demanded by the Adjudicating Authority nor they could produce any document before the Commissioner (Appeals), in support that there is no liability to pay Service Tax in case services are provided to the SEZ Units/Developers. In so far as, supply of Works Contract Service to non SEZ Units during 2012-13 to 2014-15. The liability has been confirmed as Rs. 6,25,466/- whereas, it should actually be Rs. 3,88,017/-. If Cum Tax benefit is allowed and the correct method for computation of value of service is taken into consideration. In such a case the tax liability would be only Rs. 3,47,913/-, whereas, admittedly the appellant has already paid an amount of Rs. 3,88,017/-.

5. In so far as exemption for supply made to SEZ, his main submission is that the substantive provision cannot be denied mainly because of certain procedural breach. In terms of the notification cited by the Adjudicating Authority and Commissioner (Appeals), Moreover, in terms of provisions under Section 26 of the Special Economic Zones Act, 2005 is relying on the judgment of Jurisdictional High Court in the case of GMR Aerospace Engineering Ltd., [2019 (8) TMI 748 Telangana and Andhra Pradesh High Court], which was further upheld by the Hon’ble Supreme Court. The decisions of Co-ordinate Benches in this regard are also in their favour. He is relying on the following case laws.

i) Prasad Babu Kalyanam Vs Commissioner of Central Tax Visakhaptnam – GST, [2024 (2) TMI 1308 – CESTAT Hyderabad]

ii) Commissioner of Central Tax, Medchal Vs Simhapuri Fabs in Final Order No. A/30457/