SEZ refund entitlement cannot be denied for procedural defects when services were used for authorised operations and receipt is established.

For SEZ refund claims, substantive entitlement for services used in authorised operations cannot be defeated by procedural requirements in the refund notifications. Approval by the Development Commissioner or Approval Committee is only procedural, so refund cannot be denied merely because the input services were not on the approved list if the services were actually received for authorised operations. A wrongly addressed invoice or non-production of original invoices, by itself, is also not a conclusive ground to reject refund where receipt and use of the services for the SEZ unit are otherwise established. The stated rejection of refund was therefore found unsustainable and the claims were remitted for fresh consideration.

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Issues: (i) Whether refund of service tax/CENVAT credit under the SEZ refund notifications could be denied merely because the input services were not included in the list approved by the SEZ Approval Committee. (ii) Whether refund could be denied on the grounds that invoices were addressed to premises outside the SEZ or that original invoices were not produced, despite the services being claimed to have been received for the SEZ unit.

Issue (i): Whether refund of service tax/CENVAT credit under the SEZ refund notifications could be denied merely because the input services were not included in the list approved by the SEZ Approval Committee.

Analysis: The SEZ Act confers exemption for services used for authorised operations and has overriding effect over inconsistent provisions in other laws. The requirement of approval of specified services under the refund notifications is only procedural and cannot defeat the substantive exemption where the services were actually received for authorised operations. The absence of approval by the Development Commissioner or Approval Committee, by itself, does not justify denial of refund.

Conclusion: The denial of refund solely on the ground of non-approval of services was not sustainable and was decided in favour of the assessee.

Issue (ii): Whether refund could be denied on the grounds that invoices were addressed to premises outside the SEZ or that original invoices were not produced, despite the services being claimed to have been received for the SEZ unit.

Analysis: The admissibility of refund depends on whether the services were received and consumed by the SEZ unit for authorised operations. A wrongly addressed invoice does not by itself defeat refund if the underlying receipt of service for the SEZ unit is established. Likewise, mere non-production of original invoices, where the claim is otherwise supportable and the substantive entitlement is not disputed, is a technical defect that cannot override the refund entitlement.

Conclusion: The objections based on invoice address and non-production of originals were not accepted as conclusive grounds to deny refund and were decided in favour of the assessee.

Final Conclusion: The impugned rejection of refund claims could not be sustained on the stated grounds, and the matter was sent back for fresh consideration of the claims in accordance with the legal position on SEZ refunds.

Ratio Decidendi: For SEZ units, substantive refund entitlement for services used in authorised operations cannot be defeated by procedural conditions in the refund notification, and refund should not be denied merely for absence of approval or technical invoice defects if receipt and use of the services for the SEZ unit are otherwise established.

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