2022 (5) TMI 1198 - AT - Service Tax

Rejection of rebate claim - export of service or not - rejection on the ground that the same does not qualify as export of service as well as on the ground of unjust enrichment - period from January 2010 to November 2010 - HELD THAT - This Tribunal in a similar matter pertaining to MRAS services in M/S MEDALLION CONSULTING PRIVATE LIMITED VERSUS CST, DELHI 2017 (4) TMI 96 - CESTAT NEW DELHI has held that Part performance of service outside India shall be treated as performed outside India. In the instant case, on perusal of the invoices issued by the Appellant to various overseas customers, it is clear that the benefit of these services are accruing to the customer located outside India. Thus, there is no doubt that the services will qualify to be export of services under the provisions of the Export of Service Rules, 2005. Unjust enrichment - HELD THAT - The services to be export of services, then the issue of unjust enrichment does not require our consideration as it is a settled issue that unjust enrichment principles are not applicable to export transactions as held by this Tribunal in the case of VODAFONE CELLULAR LTD AND VODAFONE ESSAR CELLULAR LTD VERSUS COMMISSIONER OF CENTRAL EXCISE 2014 (3) TMI 117 - CESTAT MUMBAI . Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Rejection of rebate application for Market Research Agency services.
2. Determination of whether the services provided qualify as export of service.
3. Consideration of unjust enrichment in export transactions.

Analysis:
1. The appeal was filed against the rejection of the rebate application for Market Research Agency services provided by the Appellant. The rejection was based on the grounds that the services did not qualify as export of service and due to unjust enrichment concerns.

2. The Tribunal examined whether the Market Research Agency services provided by the Appellant constituted an export of service. Referring to previous judgments, the Tribunal highlighted that for a service to be considered exported, it must be performed partly outside India. The Tribunal cited cases where the delivery of reports or data outside India was crucial for the completion of the service, leading to the service being classified as an export. In the present case, the invoices issued by the Appellant to overseas customers indicated that the services' benefits accrued to customers outside India, affirming that the services qualified as exports under the Export of Service Rules, 2005.

3. The Tribunal determined that once the services were classified as export of services, the issue of unjust enrichment did not require consideration. Citing precedent, the Tribunal established that unjust enrichment principles do not apply to export transactions. The Tribunal referenced a previous judgment to support this stance, emphasizing that unjust enrichment principles are not applicable to export transactions. Consequently, the Appeals were allowed with consequential relief in accordance with the law.

Conclusion:
The Appellate Tribunal CESTAT HYDERABAD ruled in favor of the Appellant, allowing the appeal against the rejection of the rebate application for Market Research Agency services. The Tribunal held that the services provided by the Appellant qualified as export of services under the Export of Service Rules, 2005. Additionally, the Tribunal determined that the principle of unjust enrichment does not apply to export transactions, further supporting the Appellant's position.