SEZ service tax refund remains available for authorised services consumed within the zone, including rent-a-cab and catering.

SEZ service tax refund notifications are procedural and facilitative, and do not curtail the statutory immunity available for authorised operations. Services consumed wholly within the SEZ remain refund-eligible when they are approved for authorised use and tax has been paid, even after amendment of the refund notification. Rent-a-cab service and outdoor catering service were treated as eligible input services for the SEZ unit because they were specifically authorised for operations and no disentitling factor such as personal use was shown. On that basis, refund entitlement was recognised for both categories of services.

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Issues: (i) Whether a unit in a Special Economic Zone is entitled to refund of service tax paid on services consumed wholly within the SEZ notwithstanding the amended refund notification; (ii) Whether rent-a-cab service and outdoor catering service used for the unit's operations qualify for refund as eligible input services.

Issue (i): Whether a unit in a Special Economic Zone is entitled to refund of service tax paid on services consumed wholly within the SEZ notwithstanding the amended refund notification.

Analysis: The amended SEZ service tax notifications were construed as providing an ab initio exemption and as prescribing only the manner in which the exemption is operationalised. The statutory immunity under the SEZ regime was held not to be eclipsed by the refund procedure in the notifications. Services consumed wholly within the SEZ, when used for authorised operations and covered by the competent authority's approval, do not lose refund eligibility merely because tax was in fact paid.

Conclusion: The issue was decided in favour of the assessee; refund could not be denied merely because the services were consumed wholly within the SEZ.

Issue (ii): Whether rent-a-cab service and outdoor catering service used for the unit's operations qualify for refund as eligible input services.

Analysis: The services were found to be specifically authorised for the SEZ unit and were treated as falling within the scope of input services, there being no finding that they were primarily for personal use or otherwise outside the permissible credit framework. The Tribunal applied the settled view that once such services are permitted for authorised operations and the tax payment is established, refund is not to be disallowed absent a disentitling factor.

Conclusion: The issue was decided in favour of the assessee; refund on rent-a-cab service and outdoor catering service was allowable.

Final Conclusion: The appeals succeeded on the substantive refund claims relating to services consumed wholly within the SEZ, and the disallowance was set aside with consequential relief as per law.

Ratio Decidendi: SEZ notifications governing service tax refunds are procedural and facilitative, and cannot curtail the statutory immunity or refund entitlement for authorised services consumed wholly within the SEZ, provided the services qualify as eligible input services under the governing credit rules.

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