Limitation for SEZ service tax refund must be tested from actual payment date, with condonation power considered before rejection.

Where a refund notification for SEZ-authorised operations measures limitation from the actual payment date of service tax and also expressly permits extension of time, the authority must first establish that payment date before rejecting the claim as time barred. On the existing record, the limitation objection could not be conclusively sustained because the payment date was not proved and the lower authority had relied on the invoice date instead. The notification's condonation power also had to be considered, so the dispute was remanded for fresh adjudication on limitation and delay condonation under the notification.

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Issues: (i) Whether the refund claim was barred by limitation under the notification governing refund of service tax for services used in SEZ authorized operations; and (ii) whether the authority had power to condone delay and whether that aspect required reconsideration.

Issue (i): Whether the refund claim was barred by limitation under the notification governing refund of service tax for services used in SEZ authorized operations.

Analysis: The refund notification provides that refund is to be claimed within one year from the end of the month in which actual payment of service tax is made by the SEZ unit to the registered service provider. The record did not establish the actual date of payment of service tax, while the lower authority had proceeded on the date of invoice raised on the ISD. In the absence of the payment date, the limitation issue could not be conclusively verified.

Conclusion: The limitation objection could not be finally sustained on the existing record and required fresh adjudication.

Issue (ii): Whether the authority had power to condone delay and whether that aspect required reconsideration.

Analysis: The notification itself confers power on the Assistant Commissioner or Deputy Commissioner to permit an extended period for filing the refund claim. The lower authority failed to consider this express power of condonation, and the appellate authority also did not address the omission properly. That legal aspect required reconsideration along with the limitation question.

Conclusion: The matter had to be remanded for fresh consideration of delay and its condonability under the notification.

Final Conclusion: The refund dispute was sent back for fresh adjudication on limitation and condonation, so the assessee obtained a reopening of the claim rather than a final allowance on merits.

Ratio Decidendi: Where the governing refund notification fixes limitation from the date of actual payment of service tax and also expressly permits extension of time, the authority must determine the actual payment date and consider condonation before rejecting the claim as time barred.

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