The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Bangalore, has set aside orders rejecting refund claims filed by Dell India Pvt. Ltd. for service tax paid on input services used in its Special Economic Zone (SEZ) operations.
The two-member bench of Dr. D.M. Misra (Judicial Member) and Mr. A.K. Jyotishi (Technical Member) has observed that the question of nexus between the approved services and the authorised operations of SEZ cannot be questioned once the approval from the Unit Approval Committee has been accorded to the appellant.
The case stemmed from refund applications filed by Dell India, which operates a major manufacturing facility in the SIPCOT SEZ at Sriperumbudur, Tamil Nadu. The company had claimed refunds of service tax paid on various input services for the period November 2010 to February 2011, amounting to over Rs. 1.12 crore. While Dell argued that these services were directly consumed in authorised SEZ operations, the adjudicating authority had rejected a substantial portion of the claims, a decision that was upheld by the Commissioner (Appeals).
During the hearing, Dell’s counsel highlighted that the services in question had been approved by the Unit Approval Committee of the SEZ, which had specifically authorised their use in manufacturing and allied activities, including IT-enabled services, call centre operations, R&D services, and transaction processing. The company contended that once the approval was granted, questioning the nexus between services and authorised operations was not permissible.
The Revenue, however, defended the lower authorities’ stance, arguing that in light of Notification No. 15/2009-ST, which grants ab initio exemption for services consumed within SEZs, refund claims were unnecessary and thus not admissible.
The Tribunal rejected this contention, observing that the issue was no longer res integra and had been conclusively addressed in several earlier rulings, including Dell India’s own cases before CESTAT in 2024 and 2025. Referring to precedents such as Tata Consultancy Services Ltd. v. CCE&ST, Mumbai [2013 (29) STR 393], the bench ruled that refunds cannot be denied once services are duly approved and consumed in authorised SEZ activities.
Consequently, the Tribunal set aside the orders of the Commissioner (Appeals) and directed that Dell India’s refund claims be allowed, along with consequential relief as per law.
Case Details
Case Title: M/s. Dell India Pvt. Ltd. Versus The Commissioner of Central Excise and Service Tax (Appeals)
Case No.: Service Tax Appeal No. 1771 of 2012
Date: 01.09.2025
Counsel For Appellant: Syed Peeran, Advocate
Counsel For Respondent: M Sreekanth, Superintendent (AR)
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