Export of service through an Indian agent was outside service tax, and refund could not be denied for unjust enrichment.

Services supplied to a foreign recipient through an Indian agent were treated as export of service because the consideration was received abroad and the agent only executed remittance in India; on that basis, the services fell outside the Indian service tax net. The refund claim was not barred by unjust enrichment because the evidence showed that uniform charges were collected from foreign customers without passing any tax burden to a third party, supported by the billing structure and a chartered accountant certificate; the refund scheme for export of services was also held not to be defeated by that doctrine. The rejection of refund was therefore unsustainable and refund with consequential relief was due.

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Issues: (i) Whether the money transfer services rendered through the Indian agent amounted to export of service and were outside the Indian service tax net; (ii) Whether the refund claim was barred by the doctrine of unjust enrichment.

Issue (i): Whether the money transfer services rendered through the Indian agent amounted to export of service and were outside the Indian service tax net.

Analysis: The arrangement involved a foreign service recipient and consideration received abroad. The services were rendered for a foreign-based entity, and the Indian agent merely executed remittance in India in pursuance of the representative arrangement. Applying the export-of-service framework and the recipient-based place-of-provision principle, the service was treated as provided to a recipient situated outside India. The reliance on an interim order in another matter was held to be misplaced in view of the later final decisions recognizing such transactions as export of service.

Conclusion: The service was export of service and was not taxable in India.

Issue (ii): Whether the refund claim was barred by the doctrine of unjust enrichment.

Analysis: The tax had been paid by the Indian agent and reimbursed by the appellant, but the evidence showed that the foreign customers paid uniform charges abroad and no separate tax incidence was passed on to any third party. A chartered accountant certificate and the billing structure supported the claim that the burden was not transferred. In addition, the principle of unjust enrichment was held not to apply to refunds arising from export of services under the statutory refund scheme.

Conclusion: The refund claim was not hit by unjust enrichment.

Final Conclusion: The rejection of refund was unsustainable, and the appellants were held entitled to refund with consequential relief in law.

Ratio Decidendi: Where services are supplied by a foreign recipient through an Indian agent and the consideration is received abroad, the transaction is export of service; refund cannot be denied on the basis of unjust enrichment when the incidence of tax is not passed on and the refund arises from export of services.

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