TaxTMI 
TaxTMI 
2026 (5) TMI 507
X X X X Extracts X X X X
X X X X Extracts X X X X
....efund for the taxable services specified in clause (105) of Section 65 of Finance Act, 1994 which are provided in relation to the authorized operations in a Special Economic Zone (SEZ) and received by a developer or units of a SEZ. While verifying the claim, the department has observed that the claimant had submitted the list of specified services duly approved by the Competent Authority (i.e. Approval Committee of Sector Specific Engineering-SEZ) prevailing prior to 27.11.2013 had been approved only on 09.01.2014 by the Approval Committee of KASEZ whereas, the claimant had claimed refund of service tax paid during the period April 2012 to March 2013 i.e. prior to approval of the list of Specified service. The department was of the view that the claimant had not fulfilled the conditions of Notification No.17/2011-ST dated 01.03.2011 and therefore, a show cause notice bearing No. V/1840/WD/ST/Ref./Cryogas/12-13 dated 12.03.2014 was issued to the claimant proposing rejection of service tax refund claim of Rs.4,75,116/- for the service tax paid on Specified Services used for Authorised Operations in SEZ as per Notification No.17/2011-ST dated 01.03.2011. 1.2 The show cause notice w....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he substantive benefit of service tax exemption provided under Section 26 of the Special Economic Zone Act and Rule 31 of the Special Economic Zone Rules cannot be denied due to procedural requirement under Notification No.9/2009-ST dated 03.03.2009. In the case of M/s. SRF Ltd. reported at 2022 (64) GSTL 489 (Tri.-Del.), CESTAT Delhi also came to the conclusion that service tax is exempted by Section 26 of the SEZ Act, 2005 and hence, the exemption notification itself is not necessary. The requirement of the exemption Notification is irrelevant as long as the services are received in the SEZ. Similar view has been taken by the Hon'ble Tribunal in the following cases:- a) M/s. Adani Power Mundra Ltd. reported at 2025 (1) TMI 224-CESTAT AHMEDABAD, b) M/s. Vedanta Aluminium Ltd. reported at 2024 (3) TMI 1325 CESTAT KOLKATA, c) M/s. EXL Services SEZ BPO Solutions (P) Ltd. reported at 2023 (9) TMI 196-CESTAT ALLAHABAD. 2.2 The learned Counsel for the appellant also submitted that as long as the department does not dispute that the services of transport of goods through pipeline were received in the SEZ, the substantive benefit of refund of service tax ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the Developer or Unit. Once this authorization is obtained, all inputs and input services which are used for such operations get exempted by virtue of Section 26. 4.1 The Tribunal has further held that while the SEZ Act itself provides for exemption from service tax as well as Central Excise duty and Customs duty, exemption Notifications were also issued by the Government under the respective laws. These exemption Notifications were also issued with some conditions. Thus, there is duplication inasmuch as the goods and services provided for authorized operations of Developers and Units in the SEZs are exempted from Customs duty, Central Excise duty and the Service Tax by the SEZ Act itself subject to the manner which may be prescribed and there are also exemption notifications under the respective tax laws which are also subject to some conditions. The exemption notifications in dispute in this case are service tax exemption Notifications ST-40/2012, dated 20.6.2013 and ST12/2013, dated 1.7.2013. This contradiction and duplication of exemption under the two provisions viz., SEZ Act and Rules and the exemption Notifications under the Finance Act, 1994 were discussed at length....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the exemption was available under Section 26 of the SEZ Act itself, this cannot be a ground for rejection of refund. 4.4 In Inox India P Ltd Vs. C.C.E. Kutch (Gandhidham) reported at 2024 (3) TMI 922- CESTAT Ahmedabad Tribunal has considered the issue involved in this appeal and decided as follows:- "4.1. We also find force in the argument of the learned Advocate that the substantive benefit of the service tax exemption provided under Section 26 of the Special Economic Zone Act and Rule 31 of the Special Economic Zone Rules cannot be denied only on procedure requirement under Notification No. 9/2009 dated 03.03.2009 as amended by Notification No. 15/2009 dated 20.05.2009. Before proceeding further in this regard it will be relevant to have glance at the provision of Section 26 of Special Economic Zone Act. "26. (1) Subject to the provisions of sub-section (2), every Developer and the entrepreneur shall be entitled to the following exemptions, drawbacks and concessions, namely :- a) exemption from any duty of customs, under the Customs Act, 1962 or the Custom Tariff Act, 1975 or any other law for the time being in force, on goods imported into, or servi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....overed by the provisions of Special Economic Zones Act, 2005. Thus, we do not find merit in the arguments and averments made by the appellate authority in impugned order to deny the benefits granted by the provisions of the Special Economic Zones Act and we find strong force in the submission of the appellant as regards eligibility for refunds in terms of the overriding provisions of Special Economic Zones Act. 4.6 In view of the law laid down in the above cases, it is settled legal position that services provided to SEZ are generally exempted as per Section 26 of the Special Economic Zone Act, 2005 and therefore, the substantive benefit of exemption provided under Section 26 of the Special Economic Zone Act and Rule 31 of the Special Economic Zone Rules cannot be denied due to procedural requirement under Notification No.17/2011-ST. As long as department does not dispute that the services of transport of goods through pipeline were received in the SEZ, the substantive benefit of refund of service tax paid cannot be denied merely because the appellant has received list of approved services after the date of filing refund claim and that the appellant has not furnished a declarati....