2026-VIL-1033-CESTAT-HYD-ST
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SERVICE TAX CESTAT Cases

Service Tax – SEZ Unit, Refund, Procedural Deficiencies - Refund claim under Notification No. 12/2013-ST dated 01.07.2013 – Rejection of substantial portion of the claim on grounds including mismatch of invoices, non-submission of original invoices, incomplete address in invoices, rubber stamp corrections and non-inclusion of certain services in the approved list - Whether refund of service tax paid on services admittedly used for authorized operations of a SEZ unit can be denied on account of procedural deficiencies in documentation – HELD - The object of the SEZ Act is to grant fiscal benefits and tax exemptions to units carrying out authorized operations. Section 26 of the SEZ Act grants exemption from taxes and duties in respect of services used for authorized operations and Section 51 gives overriding effect to the Act's provisions over any inconsistent provisions in other laws - Where receipt of services, payment of service tax and nexus with authorized operations stand established, denial of refund merely on account of invoice presentation, clerical discrepancies, rubber stamp corrections or non-availability of some original invoices cannot be sustained - The Revenue has not disputed that the Hormone Block formed part of the appellant’s SEZ unit. Once such factual position is accepted, denial of refund merely because the exact description appearing in the invoice does not identically match the wording used in the approved list would amount to elevating form over substance. The procedural infractions which do not affect substantive eligibility cannot form the basis for denial of exemption or refund - Further, construction and infrastructure creation activities undertaken during establishment of the SEZ unit are intrinsically connected with authorized operations and the expression "used for authorized operations" requires liberal and purposive interpretation to give effect to the beneficial scheme - The appellant is entitled to refund of the service tax paid on all the disputed services. The impugned order is set aside and the appeal is allowed
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