The spell was available around Christmas 2012, but not on Christmas Day itself.
Santa's Surprise was the only spell that cannot be upgraded due to being temporary, as with the two temporary traps.
Santa's Surprise takes 1 day and 1 hour to make. That's 25 hours. Christmas is on December 25th.
There was a potential cheat to win with Santa's Surprise. You could use 3 (1,500 x 3 = 4,500) Santa's Surprise spells to K.O. the opponent's Town Hall (at the time, a maxed Town Hall level 9 had 4,200 HP). If Gems were no object, it would be possible to gain significant amounts of Trophies quickly with this strategy (though it would take approximately 522 Gems to immediately brew all three spells each time, or US$4.10 per attack if bought in bulk, as a chest of gems used to cost $109.99).
Many players had speculated that there would be a chance that Santa's Surprise will come again in December 2013. However, it was not made available in the December 2013 update, which instead implemented the Santa Striketrap.
Although the spell is no longer available to create, anyone who had created the spell but had not used it would still have it in their Spell Factory. There have been continuing reports on the forums (as of May 2013) of people being attacked by Santa's Surprise.
The spell essentially serves as a much more powerful Lightning Spell with a larger damage radius.
Spells used to cost Gold; so did Santa's Surprise.