SEZ service tax refund allowed where authorised-operation services were taxed and general refund relief remained available.

Service tax paid on services used for authorised operations in a Special Economic Zone was held refundable where the tax burden had already been borne and the claim was otherwise within limitation. The Tribunal reasoned that the exemption notification for services used in relation to authorised operations did not prevent refund merely because the services were wholly consumed within the SEZ or because the claim was made under the notification framework. It also relied on the SEZ regime's treatment of such supplies as exports and the overriding effect of the SEZ Act to recognise that a broader refund remedy remained available under the general refund provision. Rejection of the refund claims was therefore unsustainable.

---

---

Issues: Whether service tax paid on services used in relation to authorised operations in a Special Economic Zone was refundable under the exemption notification and, in any event, under the refund provisions.

Analysis: The refund claims arose from services rendered to a SEZ unit for authorised operations. The governing notification exempted taxable services used in relation to authorised operations in a SEZ, and the amendment did not deprive an assessee of refund where service tax had already been discharged. The Tribunal held that when tax incidence has been borne and the claim is otherwise within limitation, refund cannot be denied merely because the services were wholly consumed in the SEZ or because the claim was filed under the notification framework. It further relied on the SEZ regime, including the deeming of such supplies as export and the overriding effect of the SEZ Act, to hold that a broader refund entitlement under the general refund provision remained available.

Conclusion: The assessee was entitled to refund of the service tax paid, and rejection of the refund claims was unsustainable.

Ratio Decidendi: Where services are used for authorised operations in a SEZ and the tax burden has been borne, refund cannot be denied merely on the ground that the services were wholly consumed within the SEZ or that exemption was available under the notification; the refund remedy under the general law remains available.

---