VISAKHAPATNAM-II vs M/S PARRY SUGARS REFINERY INDIA PVT LTD.

1 Appeal No. ST/26524/2013


CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
HYDERABAD
REGIONAL BENCH - COURT NO. – I

Service Tax Appeal No. 26524 of 2013
(Arising out of Order-in-Appeal No . 02/2013(V-II) ST dated 01.03.2013 passed by
Commissioner of Central Excise, Customs & Service Tax (Appeals), Visakhapatnam)
Commissioner of Central Tax .. APPELLANT
Visakhapatnam– II
Port Area, Visakhapatnam,
Andhra Pradesh – 530 035.

VERSUS

M/s Parry Sugars Refinery .. RESPONDENT
India Pvt Ltd.,
Vakalapudi, Kakinada,
East Godavari District,
Andhra Pradesh – 533 005.

APPEARANCE:
Shri Dr. T.V. Rajesh & Shri V. R. Pavan Kumar, Authorized Representatives for the
Appellant.
Shri Ch. Sumanth, Advocate for the Respondent.

CORAM: HON’BLE Mr. P. ANJANI KUMAR, MEMBER (TECHNICAL)
HON’BLE Mr. ANGAD PRASAD, MEMBER (JUDICIAL)

FINAL ORDER No. A/30484/2026
Date of Hearing: 07.07.2026
Date of Decision: 01.09.2026
[ORDER PER: ANGAD PRASAD]

The present appeal has been filed by the Revenue against the Order-
in-Appeal No. 02/2013(V-II) ST dated 01.03.2013 (impugned order),
whereby, the Learned Commissioner (Appeals) set aside the rejection of
refund of Rs. 72,99,743/- pertaining to the period from 01.04.2010 to
28.02.2011..
2. The respondent is a Special Economic Zone (SEZ) unit engaged in
manufacture of refined sugar. During the relevant period, it received taxable
services for its authorised operations and paid service tax thereon. A refund
claim was filed on 02.08.2011. The Adjudicating Authority sanctioned refund
of Rs. 11,73,943/- pertaining to March, 2011 but rejected refund of Rs.

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72,99,743/- relating to the earlier period on the ground that the claim was
beyond the period prescribed under Notification No. 9/2009-ST dated
03.03.2009.
3. On appeal, the Commissioner (Appeals) held that the claim was not
liable to be rejected on limitation and consequentially allowed the appeal of
the assesse. Revenue has challenged the said order before this Tribunal.
4. Learned AR submits that Notification No. 17/2011-ST came into force
only with effect from 01.03.2011 and cannot govern refund pertaining to
services received and tax paid prior thereto. According to Revenue, the
period prior to 01.03.2011 is governed by Notification No. 9/2009-ST, which
prescribed a period of six months for filing the refund claim. It is also
submitted that no application for condonation of delay was made by the
respondent.
5. Revenue further submits that refund before Departmental Authorities
has necessarily to be claimed within the statutory framework and subject to
the conditions prescribed therein. Reliance has been placed upon Mafatlal
Industries Vs Union of India [1996 (12) TMI 50 (SC)], the Larger Bench
decision in Oil and Natural Gas Corporation Ltd., Vs The Commissioner of
GST & Central Excise, Tiruchirapalli [2024 (6) TMI 1417 – CESTAT, Chennai
(LB)], M/s R.R. Stones Pvt Ltd., Vs Commissioner of Central Tax,
Rangareddy - GST, Hyderabad [2026 (7) TMI 14 – CESTAT, Hyderabad] and
Cummins Technologies India Pvt Ltd., Vs Union of India [2023 (9) TMI 199 –
BOMBAY HC] to contend that a Tribunal, being a creature of a Statute,
cannot be enlarge the limitation prescribed under a Notification.
6. Learned Counsel for the Respondent, however, submits that the
substantive exemption is conferred by Section 26(1)(e) of the SEZ Act, 2005

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and that by virtue of Section 51 of the SEZ Act, the provisions of the SEZ Act
has overriding effect over inconsistent provisions contained on other
enactments. Reliance is principally placed upon in the case of GMR
Aerospace Engineering Vs Union of India [2019 (31) GSTL 596 (AP)], as also
subsequent decisions following the said judgement.
7. We have considered the rival submissions and perused the records.
8. The limited issue before us is whether refund of service tax paid on
services admittedly used for authorised operations of a SEZ Unit can be
denied solely on the ground of limitation prescribed under Notification No.
9/2009-ST.
9. It is not disputed that Respondent is a SEZ Unit and that the services
in question were received for its authorised operations. Thus, the substantive
eligibility of the Respondent to exemption under Section 26(1)(e) of the SEZ
Act is not disputed. In GMR Aerospace Engineering Ltd., supra, the
Jurisdictional High Court examined the interplay between Section 26 of the
SEZ Act and notifications issued under the Finance Act, 1994 and held, in
substance, that the exemption flowing from the SEZ Act cannot be curtailed
by conditions imposed through notifications issued under another
enactments. The overriding effect accorded to the SEZ Act by Section 51 was
specifically noticed.
10. The Revenue seeks to distinguish the said decision by contending that
the present case concerns refund and not an ab initio exemption. We are
unable to accept the distinction as sufficient to deny the substantive benefit.
The refund arises only because service tax was paid on services which were
otherwise eligible for exemption for authorised operations of the SEZ unit.
Once the substantive entitlement under Section 26 is established, a

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procedural stipulation in the notification cannot be applied in a manner which
completely defeats such entitlement.
11. We have also considered the reliance placed by the Revenue upon
Mafatlal Industries and ONGC Larger Bench, supra. There can be no dispute
with the proposition that refund claims before Departmental Authorities are
ordinarily required to be processed within the statutory mechanism.
However, those decisions do not negate the specific ratio of the Jurisdictional
High Court concerning the overriding effect of Section 26 and 51 of the SEZ
Act. The present case is therefore distinguishable from a case where the very
entitlement to refund arises only from an exemption notification.
12. Similarly, the decision in the case of M/s R.R. Stones Pvt Ltd., supra,
relates to a situation where the benefit itself arose under a notification
containing a specific limitation condition. In the present case, the substantive
exemption flows from Section 26 of the SEZ Act, whereas the notification
provides the machinery for extending the benefit by way of refund. The
same reasoning also answers the reliance placed on Cummins Technologies
India Pvt Ltd., supra. We further find that subsequent decisions of the
Tribunal, including those relied upon by the Respondent, have consistently
followed the principle that procedural requirements contained in notifications
cannot be applied so as to defeat the substantive exemption available to SEZ
Units in respect of authorised operations.
13. In view of the above, we hold that the refund of Rs. 72,99,743/-
cannot be rejected solely on the ground that the claim was beyond six-
month period prescribed under Notification No. 9/2009-ST. In view of this
conclusion, it is not necessary to conclusively decide the alternative

5 Appeal No. ST/26524/2013


contention as to whether the one-year period prescribed under Notification
No. 17/2011-ST would also apply to the claim relating to earlier period.
14. Consequentially, though we may not entirely agree with every reason
recorded by the Commissioner (Appeals), we find that the ultimate
conclusion granting the benefit of refund to the Respondent is legally
sustainable.
15. Accordingly, the appeal filed by the Revenue is dismissed and the
impugned Order-in-Appeal is upheld. The Respondent shall be entitled to
consequential relief, if any, in accordance with law.
(Pronounced in the open court on 01.09.2026 )


(P. ANJANI KUMAR)
MEMBER (TECHNICAL)



(ANGAD PRASAD)
MEMBER (JUDICIAL)

jaya