SEZ refund entitlement prevails over procedural refund limits, but disputed claim components need fresh verification and reconsideration.

SEZ units are entitled to substantive exemption for taxable services used for authorised operations, and refund notifications cannot be construed to curtail that protection under the overriding SEZ Act. Accordingly, refund of service tax could not be denied merely because the services were wholly consumed within the SEZ, and the broader legal objection was unsustainable. However, disputed components of the claim involving excess amount, invoices not in the unit's name, and minor documentary discrepancies required factual verification, so those parts were remanded for fresh adjudication.

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Issues: (i) Whether refund of service tax paid by a Special Economic Zone unit could be denied on the ground that the services were wholly consumed within the SEZ and therefore outside the scope of the exemption notifications; (ii) whether the refund claims required reconsideration in respect of excess claim, invoices not in the appellant's name, and minor documentary discrepancies.

Issue (i): Whether refund of service tax paid by a Special Economic Zone unit could be denied on the ground that the services were wholly consumed within the SEZ and therefore outside the scope of the exemption notifications.

Analysis: The statutory scheme under the Special Economic Zones Act, 2005 grants exemption to SEZ units in respect of taxable services used for authorised operations, and the Act contains an overriding provision giving it primacy over inconsistent laws or instruments. The refund notifications were treated as procedural mechanisms to operationalise that immunity and could not be read so as to curtail the substantive exemption available under the SEZ law. On that construction, the fact that the services were wholly consumed within the SEZ did not disentitle the unit from refund of service tax already paid.

Conclusion: The denial of refund on the ground that the services were wholly consumed within the SEZ was unsustainable and the claim was maintainable in principle.

Issue (ii): Whether the refund claims required reconsideration in respect of excess claim, invoices not in the appellant's name, and minor documentary discrepancies.

Analysis: Although the substantive objection based on consumption within the SEZ could not be sustained, the record showed that part of the claim had been rejected on factual and documentary grounds, including excess claim and invoices not matching the appellant's name. Those aspects required verification by the adjudicating authority rather than final rejection on the broader legal ground.

Conclusion: The matter was required to be remanded for fresh adjudication of the disputed claim components.

Final Conclusion: The legal objection against refund was rejected, but the disputed portions of the claim were sent back for verification and reconsideration.

Ratio Decidendi: The exemption and refund mechanism for SEZ units is governed by the overriding substantive protection under the SEZ Act, and refund notifications cannot be construed to take away that statutory immunity where service tax has been paid on services used for authorised operations.

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