SEZ service tax refund requires verification of approved services, nexus, and documents before rejection is sustained.

Refund of service tax on input services used in SEZ operations turns on factual verification of whether the services were covered by the approved list, whether any subsequent approval by the Development Commissioner was obtained, and whether the claimed nexus with export-related operations is supported by records. Where those foundational facts are not examined, and supporting invoices and documents are available for verification, final rejection is not sustainable. The claims require de novo consideration by the original authority on the approved services, nexus, and documentary compliance.

---

---

Issues: (i) whether refund of service tax paid on input services used in SEZ operations was to be denied on the ground that some services were not included in the approved list of specified services and whether the Development Commissioner's subsequent approval had to be examined; (ii) whether the refund could be rejected for alleged absence of nexus between the input services and the output/export operations and for non-submission of supporting documents.

Issue (i): whether refund of service tax paid on input services used in SEZ operations was to be denied on the ground that some services were not included in the approved list of specified services and whether the Development Commissioner's subsequent approval had to be examined.

Analysis: The disputed services were stated to have been subsequently included by the competent SEZ authority after considering the nature of the SEZ operations. The approved list was not examined by the authorities below. Since the factual verification of the subsequent approval was required at the original stage, the refund claim on this ground could not be finally rejected without such examination.

Conclusion: The matter on this issue was remanded to the original authority for fresh examination of the approved list and the applicable notifications.

Issue (ii): whether the refund could be rejected for alleged absence of nexus between the input services and the output/export operations and for non-submission of supporting documents.

Analysis: The record did not contain a clear finding that the SEZ unit was diverting the goods to the Domestic Tariff Area, and the alleged lack of nexus required factual verification in the context of the SEZ manufacturing and export operations. The supporting invoices and related documents were also stated to be available for production and verification. These matters therefore required reconsideration by the original authority.

Conclusion: The matter on this issue was also remanded for fresh adjudication and verification of documents.

Final Conclusion: The rejection orders were set aside and the refund claims were sent back for de novo consideration on merits after factual verification of the approved services, nexus, and supporting records.

Ratio Decidendi: Where refund under SEZ-related service tax notifications turns on factual compliance such as approved services, nexus, and documentary verification, final rejection without examining those foundational facts is unsustainable and the matter must be reconsidered on remand.

---