SEZ refund entitlement turns on tax payment for authorised operations; delayed approval is only a procedural lapse.

For refund under the SEZ exemption notification, the decisive factor is the actual payment of service tax on a specified service used for authorised operations, not the earlier date of service receipt. Where the service was exclusively used by the SEZ unit for authorised operations and tax under reverse charge was discharged after the service was approved as specified, delayed prior approval was only a procedural lapse. The substantive exemption benefit could not be denied on that ground, and the refund claim was admissible.

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Issues: Whether refund of service tax paid on business support service was admissible to a 100% SEZ unit when the service had been received earlier but the tax was paid after the service was included as a specified service for authorized operations.

Analysis: Notification No. 12/2013 dated 01.07.2013 grants exemption by way of refund of service tax paid on specified services received by an SEZ unit for authorized operations. The relevant consideration for the refund claim was the date on which the service tax was actually paid, not the date on which the service was rendered. The service was exclusively used for authorized operations, and the tax under reverse charge mechanism was discharged only after the service had been approved as a specified service. The absence of prior approval was treated as a procedural lapse and could not defeat the substantive exemption benefit.

Conclusion: The refund was admissible and the rejection of the claim was unsustainable.

Ratio Decidendi: For refund under the SEZ exemption notification, the decisive factor is payment of service tax on a specified service used for authorized operations, and a procedural defect such as delayed approval cannot deny the substantive benefit.

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