SEZ service tax refund upheld where approved authorised operations and prior tax payment defeated no-nexus objections

Refund of service tax on services used for authorised SEZ operations was held admissible where the Approval Committee had certified the services as relating to authorised operations. A contrary departmental view on nexus was rejected, since the same issue had already been decided in the assessee's favour on identical facts. The availability of an exemption for services wholly consumed within the SEZ did not, by itself, defeat refund where tax had already been paid. The Tribunal therefore allowed the appeals and granted consequential relief.

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Issues: Whether a Special Economic Zone unit was entitled to refund of service tax paid on services used for authorised operations when the services were approved by the Approval Committee, and whether refund could be denied on the grounds of ing nexus or because some services were wholly consumed within the SEZ and could have been availed under exemption.

Analysis: The refund claims were based on services said to be used in the authorised operations of the SEZ unit under Notification No. 9/2009-ST. The Tribunal noted that the very same issue had already been decided in the assessee's favour in earlier appeals, following the principle that once the Approval Committee certifies services as relating to authorised operations, a contrary view cannot later be taken by departmental officers. It was also reaffirmed that the existence of an exemption for services wholly consumed within the SEZ does not, by itself, defeat a refund claim where tax has already been paid.

Conclusion: The refund was held admissible and the denial on the grounds of lack of nexus and availability of exemption was rejected.

Final Conclusion: The appeals were allowed with consequential relief to the assessee, following the earlier binding Tribunal view on identical facts.

Ratio Decidendi: Where services are certified as relating to authorised operations of an SEZ unit, refund of service tax cannot be denied by taking a contrary view on nexus, and prior payment of tax does not bar refund merely because an exemption was also available.

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