SEZ service tax refund cannot be denied for invoice description defects or because exemption was available at the provider's end.

An SEZ unit's refund claim of service tax on received services cannot be rejected merely because the invoices were said to describe the services inadequately, where the record showed photostat copying and related business support services rather than supply of machines or printers. Notification No. 40/2012-ST was treated as operating for both the service provider and the SEZ recipient, and the unit was entitled to claim refund where receipt of services and tax payment were undisputed. The fact that the services may have been capable of exemption at the provider's end did not bar refund to the SEZ unit. The refund rejection was therefore unsustainable.

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Issues: (i) Whether the refund claim of service tax paid on services received by an SEZ unit was liable to be rejected on the ground that the invoices did not properly describe the services; (ii) Whether the assessee was entitled to refund under Notification No. 40/2012-ST dated 20.06.2012 even though the services were said to be covered by the authorised list.

Issue (i): Whether the refund claim of service tax paid on services received by an SEZ unit was liable to be rejected on the ground that the invoices did not properly describe the services.

Analysis: The invoices and accompanying documents showed that the services were photostat copying and related business support services rendered under the agreement, and not supply of machines or printers. The description recorded by the service provider identified the services as business support services, and the objection that the description was unacceptable was not supported by the record.

Conclusion: The objection as to the description of services was rejected in favour of the assessee.

Issue (ii): Whether the assessee was entitled to refund under Notification No. 40/2012-ST dated 20.06.2012 even though the services were said to be covered by the authorised list.

Analysis: Notification No. 40/2012-ST was treated as operating in two parts for the service provider and the SEZ recipient. Since the assessee was an SEZ unit, the receipt of services and payment of service tax were undisputed, and the notification enabled the SEZ unit to pay service tax and claim refund. The lower authorities' view that exemption alone had to be availed was not accepted.

Conclusion: The assessee was eligible to claim refund of the service tax paid.

Final Conclusion: The refund rejection was unsustainable and the assessee succeeded on the merits of the claim.

Ratio Decidendi: Where an SEZ unit has received taxable services and satisfies the conditions of the applicable refund notification, refund cannot be denied merely on an objection to invoice description or on the basis that the services were capable of exemption at the provider's end.

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