SEZ refund under service tax notification: common use with DTA supply and limitation objections could not defeat the claim.

SEZ refund under Notification No. 12/2013-ST was examined on two points: common use of services for SEZ and DTA operations, and limitation. The Tribunal applied its earlier decision in the assessee's own case and stated that refund of service tax on specified services used for authorised SEZ operations could not be denied merely because those services also related to DTA supply. It also read the notification's time-computation provisions to hold that the claim was filed within the prescribed period. The rejection of refund was set aside, and the refund claims were allowed with consequential relief.

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Issues: (i) whether refund of service tax paid on specified services used for authorised operations in an SEZ could be denied on the ground that the services were used commonly for SEZ and DTA activities; and (ii) whether the refund claim was barred by limitation.

Issue (i): whether refund of service tax paid on specified services used for authorised operations in an SEZ could be denied on the ground that the services were used commonly for SEZ and DTA activities.

Analysis: The refund was claimed under Notification No. 12/2013-ST dated 01.07.2013 for services used for authorised operations in the SEZ. The Tribunal followed its earlier decision in the assessee's own case on identical facts and held that the condition relied upon by the department, concerning common use between SEZ and DTA, was not applicable in the same manner where the assessee had an SEZ unit and was supplying to a DTA unit. The denial of refund on the ground of common use was therefore not sustainable.

Conclusion: The refund could not be denied on the ground of common use of services between SEZ and DTA, and the assessee succeeded on this issue.

Issue (ii): whether the refund claim was barred by limitation.

Analysis: The Tribunal applied the earlier order in the assessee's own case and read paragraph 3(III)(e) and paragraph 3(III)(f) of Notification No. 12/2013-ST dated 01.07.2013 to hold that the claim was within the prescribed time. The objection based on limitation was rejected.

Conclusion: The refund claim was not time barred, and the assessee succeeded on this issue as well.

Final Conclusion: The impugned order rejecting the refund was set aside and both appeals were allowed with consequential relief, if any.

Ratio Decidendi: Where the substantive conditions of the SEZ refund notification are satisfied, refund cannot be denied merely because the services also relate to DTA supply, and the limitation objection must yield to the notification's own time-computation scheme when the claim is filed within that framework.

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