SEZ service tax refund limitation must be applied purposively where delay condonation power exists under the notification.

A refund claim for service tax relating to services used in an SEZ was rejected as time-barred under Notification No. 17/2011-ST. Clause 3(e) was noted to empower the adjudicating authority to condone delay or extend the filing period on sufficient justification, and that power was to be applied purposively to advance the object of making SEZ services tax free. The matter was therefore required to be reconsidered after giving due opportunity, applying natural justice, and addressing clause 3(e) in its proper perspective.

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Issues: Whether the refund claim could be rejected as time-barred under Notification No. 17/2011-ST despite clause 3(e) empowering the adjudicating authority to condone or extend the filing period on sufficient justification.

Analysis: The refund was denied on limitation grounds. Clause 3(e) of the notification conferred power on the adjudicating authority to condone delay or extend the period for filing the refund claim when proper justification was shown. Since the claim related to refund of service tax on services received in the SEZ area, that power was required to be exercised in a broader and purposive manner to advance the object of making services to SEZ tax free. The matter therefore required reconsideration after giving due opportunity and applying the notification in its proper perspective.

Conclusion: The rejection of the refund claim was set aside to the relevant extent and the matter was remanded to the adjudicating authority for fresh decision after following natural justice and considering clause 3(e) of Notification No. 17/2011-ST.

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