2018 (9) TMI 1421 - HC - Service Tax

Refund claim - export of services or not - Whether the services provided by the Respondent herein qualify as export of service under the provisions of Export of Services Rules, 2005? - Held that - An identical nature of service as rendered by the Respondent to its foreign clients had come up for consideration before this Court in Commissioner of Service Tax, Mumbai VI Vs. ATE Enterprises (P) Ltd. 2017 (8) TMI 1233 - BOMBAY HIGH COURT , where this Court has held that the service of procuring orders and passing it to overseas manufacturers / clients and receiving the payments for the same is an activity of export of service. Thus qualifies as Export of Service under the Export of Taxable Service Rules, 2005 - decided in favor of respondent. Whether the CESTAT is right in holding that the Respondent herein are entitled for refund when there is no application made under the prescribed format under the relevant provisions of law and without complying the procedural formalities prescribed under the law? - Held that - From the facts available on record, it was never the case of the Revenue that there was unjust enrichment on the part of the Respondent Assessee. It seems to have accepted the assessee s stand that there is no unjust enrichment was made in the refund application. As at no point of time before the first Authority or Appellate Authorities was the issue of unjust enrichment raised by the Appellant either in the submissions and / or by filing the cross appeals / cross objections to the Appellate Authorities - the question does not give rise to any substantial question of law and is not entertained. Appeal dismissed - decided against Revenue.

Summary

Issues:
1. Whether the services provided qualify as export of service under Export of Services Rules, 2005?
2. Whether the refund claimed by the Respondent is valid without complying with procedural formalities?

Analysis:

Issue 1:
The Respondent erroneously paid service tax on the export of service and sought a refund under the Export of Taxable Service Rule, 2005. The service involved procuring purchase orders for foreign clients, who then supplied goods to buyers in India. The Tribunal allowed the refund based on a previous court decision. The High Court found that the service of procuring orders and passing them to overseas clients qualifies as export of service under the Export of Taxable Service Rules, 2005. The Court rejected the Revenue's argument as the issue was already settled in a previous case. Therefore, the first question did not raise any substantial question of law and was not entertained.

Issue 2:
The Appellant argued that the refund was granted without considering unjust enrichment. However, the Court found that the refund application clearly stated that the tax was paid out of the commission received. The Revenue did not raise any objection on unjust enrichment in the show cause notice or during the proceedings. As the issue was not raised at any stage, the Court concluded that the Appellant's submission lacked basis. Therefore, the second question did not give rise to any substantial question of law and was not entertained. Consequently, the Appeal was dismissed with no order as to costs.