2015 (2) TMI 614

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.... services received in an SEZ unit are exempted from payment of service tax. However, the scheme of exemption operates in a manner that the service tax is first paid by the service provider and thereafter refund is claimed by the service receiver in the SEZ unit under the provisions of Notification NO. 9/2009 Notification No. 15/2009 amended Not. No. 9/2009 to the effect that this exemption scheme of granting refund to the service receiver will not apply in cases where the services are wholly consumed within the SEZ. In the present case since the services were wholly consumed within the SEZ, the department has ordered recovery of the refund sanctioned by the adjudicating authority. 3. The Ld. AR reiterated the findings of the Commissioner. ....

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.... or units of Special Economic Zone shall be provided by way of refund of service tax paid on the specified services used in relation to the authorised operations in the Special Economic Zone except for services consumed wholly within the Special Economic Zone;" 4.1 I note that the SEZ Act 2005, under Section 26(i) (e), provides that all services imported into the SEZ to carry on authorized operations in SEZ shall be exempted. Further Section 51 of this Act gives overriding effect over other Acts. This being the legal position, the condition of Notification No. 15/2009 that refund is only admissible to services which are not wholly consumed within the SEZ cannot nullify the overriding provisions of Section 51 of the SEZ Act. The law makes m....