Export of service and unjust enrichment rules supported refund of service tax on brokerage charges paid for overseas investors.

Brokerage services rendered to institutional investors situated abroad and paid for in convertible foreign exchange were treated as export of service, so service tax was not leviable on those services. On that basis, the refund claim was admissible, and the bar of unjust enrichment did not apply to the exported-service refund. Rejection of the claim on unjust enrichment grounds was therefore unsustainable.

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Issues: Whether refund of service tax paid on brokerage charges received from foreign institutional investors was admissible as the services amounted to export of service, and whether rejection of the refund claim on the ground of unjust enrichment was justified.

Analysis: The services were rendered to institutional investors situated abroad and the consideration was received in convertible foreign exchange. In such circumstances, the services were treated as export of service, and service tax being a destination-based levy, liability did not arise on such exported services. On that basis, the bar of unjust enrichment was held not to apply to the refund claim.

Conclusion: The refund claim was allowable and the rejection based on unjust enrichment was unsustainable.

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