2024 (10) TMI 1180 - AT - Service Tax

Refund of service tax - export of service in terms of Rule 6A of Service Tax Rules, 2012 r/w Rule 3 of Place of Provision of Service Rules, 2012 - services claimed to be advertising agency services, provided by the appellant from India through electronic media to their group companies/clients of its overseas group companies located outside India - principles of unjust enrichment - it is submitted that for the earlier years i.e. April, 2011 upto June, 2012 the department kept on sanctioning refunds to the appellant on the same set of documents by considering the service as Advertising Agency service without raising any doubt - HELD THAT - After looking at the earlier orders of granting refund, it is deemed proper to firstly take up the issue about the inconsistency in the orders of Adjudicating Authority that too for the very same assessee. In our view, the issues have been dealt with by the lower authorities in a most casual way. Time and again it has been repeated through various judicial precedents that the revenue cannot be permitted to adopt an inconsistent stand in a subsequent assessment where the facts are identical unless there is change in law. None of the authorities below have considered it proper to even address the submission on behalf of the appellant regarding the earlier orders of the Adjudicating Authority granting refund for the same service. That becomes relevant when no appeals have been preferred by the revenue against the said order. The revenue cannot be permitted to adopt an inconsistent stand in subsequent proceedings when the facts are identical unless they show that the law has changed but nothing of that sort has been attempted. The authorities below have failed to base their decision of rejecting the refund claim on any change in law or circumstance, rather they ignored the said submission on behalf of the appellant - also, w.e.f. 1.7.2012 substantial changes by way of amendment have been affected in the Finance Act as well as in the Service Tax Rules and also various new Rules such as Place of Provision of Service Rules, 2012 etc. were brought into effect. It s deemed proper to remand the matter back to the Adjudicating Authority for denovo adjudication after taking into consideration their earlier orders of granting refunds to the appellant and also after taking into consideration all the submissions of the appellant and the laws applicable at the relevant time. The said authority must provide a proper opportunity of hearing to the appellant. Appeals filed by the appellant are allowed by way of remand to the Adjudicating Authority.

Summary

Issues:
1. Whether the services provided by the appellant to overseas group companies qualify as export of service for service tax refund?
2. Whether the refunds claimed are affected by the doctrine of unjust enrichment?

Issue 1:
The appellant claimed service tax refunds for providing Advertising Agency Services to overseas group companies, arguing it qualifies as export of service under Rule 6A of Service Tax Rules, 2012. The Adjudicating Authority rejected the claims, stating the services were intermediary services and not eligible for refund. The appellant contended that they provided services on a principal-to-principal basis and not as intermediaries, as they interacted directly with the overseas group company's clients. The issue of unjust enrichment was also raised. The Tribunal noted the inconsistency in the Adjudicating Authority's previous refund orders for the same services. Citing legal precedents, the Tribunal remanded the matter back to the Adjudicating Authority for a fresh decision, considering the earlier refund orders and relevant laws.

Issue 2:
The Tribunal highlighted the importance of consistency in decisions and referred to legal principles regarding res judicata. It noted that the nature of services provided by the appellant remained unchanged, and the authorities failed to justify rejecting the refund claims based on any change in law or circumstances. The Tribunal emphasized the need for the Adjudicating Authority to re-examine the case, considering all submissions and applicable laws at the relevant time. The Tribunal set aside the impugned order and allowed the appeals by remanding the matter for fresh adjudication.

This judgment addresses the issues of export of service eligibility and unjust enrichment concerning service tax refunds claimed by the appellant for providing Advertising Agency Services to overseas group companies. The Tribunal emphasized the importance of consistency in decisions and remanded the matter back to the Adjudicating Authority for a fresh decision, considering past refund orders and relevant legal principles.