SEZ refund for rent a cab services cannot be denied for want of prior Approval Committee approval when refund was claimed later.

Refund of service tax credit for rent a cab services used by an SEZ unit for authorised operations could not be denied merely because Approval Committee approval was absent when the services were received. Notification No. 12/2013 was read as not requiring prior approval at the receipt stage, and the relevant date was the filing of the refund claim after the service had been included in the specified services list. Section 51 of the Special Economic Zones Act, 2005 gave the SEZ regime overriding effect over inconsistent service tax requirements, and the later instruction was treated as clarificatory and retrospective. Refund with consequential relief was therefore allowed.

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Issues: Whether refund of service tax credit on rent a cab services used by an SEZ unit for authorised operations could be denied on the ground that the service was not approved by the Approval Committee when received and that the relevant inclusion through Instruction No. 79 applied only prospectively.

Analysis: Notification No. 12/2013 did not require prior approval by the Approval Committee at the time the services were received. The refund claims were filed after rent a cab service had been included in the specified services list, and the governing principle applied was the date of filing of the refund claim, not the date of receipt of the services. The SEZ regime grants exemption for services used for authorised operations, and Section 51 of the Special Economic Zones Act, 2005 gives the SEZ Act and Rules overriding effect over inconsistent requirements in the service tax regime. The later instruction was treated as clarificatory in nature and therefore applicable retrospectively.

Conclusion: The denial of refund on the ground of absence of Approval Committee approval during the relevant period was not sustainable, and the assessee was entitled to refund with consequential relief.

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