CESTAT Chennai Allows Nissan Group SEZ Unit's Claim For Refund Of Service Tax Paid

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) at Chennai has ruled in favour of Renault Nissan Technology and Business Centre India, holding that service tax refund claims of Special Economic Zone units cannot be rejected only because they were filed late.

A coram of Judicial Member P. Dinesha and Technical Member Vasa Seshagiri Rao said the six-month time limit in Notification No. 9/2009 Service Tax is procedural. It cannot defeat the statutory exemption under the SEZ law.

The tribunal held, “the time limit prescribed under the Notification [supra] cannot be pressed into service to deny the substantive benefit of exemption flowing from Section 26 of the SEZ Act,”

The appeal was filed by Renault Nissan Technology And Business Centre India Pvt. Ltd. The company operates from an SEZ and provides engineering, research, and technology services to the Renault Nissan group. Between March and October 2009, it paid service tax on input services used for authorised SEZ operations. It later sought refunds under the 2009 notification. The adjudicating authority allowed part of the claim but rejected the rest, mainly because some claims were filed beyond six months. The Commissioner (Appeals) upheld those rejections.

Before the tribunal, the company said it was fully exempt from service tax under Section 26 of the SEZ Act. It argued that the notification only provides a method to claim that exemption. It also said the longer one-year period under Section 11B of the Central Excise Act should apply.

The tribunal also criticized the department for rejecting refund claims without issuing a show cause notice. It said such a notice is the foundation of any adverse action. It added that once services are approved by the SEZ Approval Committee, the nexus with authorised operations is settled. Refunds cannot be denied on that ground. The appeals were allowed.

Case Title: Renault Nissan Technology And Business Centre India Pvt. Ltd. v. Commissioner of GST & CE

Citation: 2026 LLBiz CESTAT (CHE) 14

Case Number: Service Tax Appeal No. 40118 of 2014

For Appellant/ Assessee: K. Sivarajan, Chartered Accountant

For Respondent/ Department: G. Krupa, Authorised Representative