SEZ refund exemption prevails over notification-based limitation, so service tax refund claims cannot be rejected as time-barred.

A Special Economic Zone developer entitled to exemption for services used in authorised operations could not be denied refund on the ground of limitation in the service tax notification or Section 11B of the Central Excise Act. The SEZ Act, 2005 grants substantive exemption and, by its overriding clause, prevails over inconsistent levy and refund restrictions. A notification issued under Section 93(1) of the Finance Act, 1994 is only facilitative and cannot curtail that statutory immunity. The refund claims were therefore not time-barred and the denial was unsustainable, so refund relief followed in favour of the assessee.

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Issues: Whether a Special Economic Zone developer entitled to exemption from service tax under the SEZ regime can be denied refund on the ground of limitation prescribed in the service tax notification and Section 11B of the Central Excise Act, 1944.

Analysis: The SEZ Act, 2005 grants exemption to developers for services used for authorised operations, and Section 51 gives the SEZ provisions overriding effect over inconsistent laws. The notification issued under Section 93(1) of the Finance Act, 1994 is only a facilitative mechanism for operationalising that statutory exemption and cannot curtail the substantive immunity granted by the SEZ law. The limitation condition in the notification, and the time bar applied under Section 11B, cannot override the higher statutory exemption available to a SEZ developer.

Conclusion: The refund could not be rejected as time-barred, and the denial was unsustainable. The issue is decided in favour of the assessee.

Final Conclusion: The service tax refund claims of the SEZ developer are admissible, and the consequential refund relief follows in accordance with law.

Ratio Decidendi: A subordinate notification issued under the Finance Act, 1994 cannot impose a limitation that restricts or defeats the substantive exemption granted by the SEZ Act, 2005, which prevails by virtue of its overriding clause.

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