SEZ unit service tax refund claims cannot be denied for unlisted services as SEZ Act overrides other laws

CESTAT Allahabad allowed appeals by remand in a service tax refund case involving SEZ unit. The tribunal held that refund claims cannot be denied merely because services are not listed in SEZ-approved specified services, as this is procedural rather than mandatory requirement. SEZ Act has overriding effect over other laws. For invoices addressed to premises outside SEZ but consumed within SEZ, matter was remanded for verification of actual consumption within SEZ unit. Refund admissible subject to appellant satisfying authorities regarding receipt and consumption of services within SEZ premises.

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Issues involved:
1. Denial of claim for refund based on specified services approved by SEZ authorities.
2. Denial of claim for refund against invoices addressed to Appellant's Unit outside the SEZ but consumed within the SEZ.

Issue 1 - Denial of claim for refund based on specified services approved by SEZ authorities:
The issue involved in the first appeal (ST/70531/2020) was the denial of a refund claim under notification No.9/2009-ST on the grounds that services were not listed as specified services approved by SEZ authorities. The second appeal (ST/70529/2020) also dealt with a similar denial of refund claim against invoices consumed within the SEZ but addressed to the Appellant's Unit outside the SEZ. The Tribunal had previously considered these issues in Final Order Nos.70277-70280/2023 and remanded the second matter back to the Original Authority for further consideration.

Upon review, it was found that the issue was covered by the Tribunal's previous order dated 21 December, 2023. The Tribunal discussed whether refund should be admissible for services consumed by the SEZ unit, even if not specifically listed as authorized services. Citing various decisions, including EXL Services SEZ BPO Solutions Pvt. Ltd. and Tega Industries Ltd., it was concluded that such refunds are admissible. The Tribunal emphasized that the SEZ Act's provisions override other laws, and procedural lapses should not lead to refund denials.

Issue 2 - Denial of claim for refund against invoices addressed to Appellant's Unit outside the SEZ:
Regarding the second issue, the Tribunal examined whether services invoiced to the Appellant's Unit outside the SEZ but consumed within the SEZ would qualify for a refund. Relying on precedents such as SRF Ltd., it was determined that refund claims cannot be denied solely based on the address on the invoice. The Tribunal allowed both appeals by remanding them for further consideration in line with the observations made in the previous order dated 21 December, 2023.

In conclusion, the Original Authority was directed to finalize the refund claims within three months from the receipt of the Tribunal's order, ensuring a timely resolution of the longstanding matter.

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