Refund of service tax on export input services cannot be denied merely for delayed SEZ approval when application was filed in advance.

Refund of service tax on input services used for export of services cannot be denied solely because SEZ competent authority approval was issued after the refund application, where the approval application had been filed in advance and before completion of the export transaction. The delayed issuance of approval was treated as an administrative lapse that did not extinguish an exemption entitlement already accrued on the facts. The reasoning was supported by an earlier decision granting relief despite later permission. The refund claim was therefore considered maintainable under Notification No. 17/2011-ST dated 01/03/2011, with consequential relief stated to follow in accordance with law.

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Issues: Whether refund of service tax paid on input services used for export of services could be denied merely because approval of the input services by the SEZ competent authority was granted after the application and before the export transaction was completed.

Analysis: The input services on which refund was claimed were used for export of services, and the appellant had applied for approval well before the export transaction. The subsequent grant of approval did not alter the fact that the application had been made in advance. A delay in issuing approval was treated as an administrative lapse that could not defeat the exemption entitlement that had already accrued. The earlier decision granting relief despite later permission supported this view.

Conclusion: The refund claim could not be rejected on the ground of delayed approval, and the appellant was entitled to refund under Notification No. 17/2011-ST dated 01/03/2011.

Final Conclusion: The appeal succeeded and the refund entitlement was upheld with consequential relief in accordance with law.

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