Reverse charge service tax refund turns on proof of actual service receipt, with remand for factual verification

Refund of service tax paid under reverse charge depended on whether the alleged management or business consultant services were actually received from the foreign service provider. The record indicated that the earlier finding was based on assumption rather than evidence, and the factual position required verification before refund could be determined. The order was set aside and the matter remanded to the lower authorities to examine receipt of services. If no services were received, the service tax was to be refunded and the objection of unjust enrichment was not to be applied.

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Issues: Whether service tax paid under reverse charge on alleged management or business consultant services was refundable when the assessee claimed that the corresponding M&A services were not actually received, and whether the matter required factual verification before refund.

Analysis: The claim turned on whether the foreign service provider had supplied the disputed services. The finding recorded by the lower authority was held to rest on assumption and presumption rather than evidence. Where no service is received, the corresponding value is not liable to service tax. The earlier deposit of tax by the assessee itself was also relevant to the plea that refund could not be denied merely on a theoretical unjust enrichment objection. The factual position still required verification as to whether the services were in fact received.

Conclusion: The impugned order was set aside and the matter was remanded to the lower authorities to verify receipt of services. If the services were not received, the service tax was to be refunded to the assessee without applying unjust enrichment.

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