Service tax refund for services wholly consumed in a Special Economic Zone was allowed where authorised operations were established.

Refund of service tax on Information Technology Software Services, Banking and Financial Services, and Business Auxiliary Service was treated as admissible where the services were approved for authorised operations and wholly consumed within a Special Economic Zone. The Tribunal relied on earlier decisions in the assessee's own case and held that refund could not be denied merely because the services were otherwise capable of being received without tax or because the nexus with authorised operations was challenged belatedly. The impugned order was set aside in favour of the assessee.

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Issues: Whether refund of service tax paid on Information Technology Software Services, Banking and Financial Services, and Business Auxiliary Service was admissible when the services were wholly consumed in a Special Economic Zone.

Analysis: The Tribunal noted that the issue stood covered by earlier decisions in the assessee's own case and by the decision relied upon therein. It was accepted that once the services were approved for authorized operations and were consumed entirely within the Special Economic Zone, refund could not be denied on the ground that the services were otherwise capable of being received without payment of tax or on a belated challenge to their nexus with authorized operations.

Conclusion: Refund was held admissible and the impugned order was set aside, in favour of the assessee.

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