Export of service treatment upheld for inbound roaming, with refund allowed and unjust enrichment held inapplicable.

International inbound roaming services supplied in India to subscribers of foreign telecom operators were treated as export of service because the contract was with, and consideration was received from, the foreign telecom provider, which was the contractual recipient. Following earlier Tribunal decisions, the services were held not exigible to service tax, and consequential rebate or refund was allowed. On refund, the Tribunal held that unjust enrichment does not defeat claims arising from exported services under the statutory refund framework. The impugned orders were set aside and the assessee obtained consequential relief.

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Issues: (i) Whether international inbound roaming services provided in India to subscribers of foreign telecom service providers constitute export of service and therefore are not exigible to service tax, with consequential entitlement to rebate/refund; (ii) whether the refund of service tax paid on such export transactions is hit by unjust enrichment.

Issue (i): Whether international inbound roaming services provided in India to subscribers of foreign telecom service providers constitute export of service and therefore are not exigible to service tax, with consequential entitlement to rebate/refund.

Analysis: The service agreement was between the appellant and the foreign telecom service provider, which paid for the roaming facility. The foreign telecom provider, and not the inbound roamer in India, was treated as the recipient of service. The reasoning of earlier Tribunal decisions on identical facts was followed, and the Board circular relied upon by the Revenue was held not to prevail over the later binding judicial determination. On that basis, the service was treated as export of service.

Conclusion: In favour of the assessee. The roaming services were held to be export of service and not liable to service tax, with consequential relief.

Issue (ii): Whether the refund of service tax paid on such export transactions is hit by unjust enrichment.

Analysis: Once the service was held to be exported, the refund claim was examined under the statutory refund framework, under which export transactions are outside the mischief of unjust enrichment. The Tribunal followed its earlier view that unjust enrichment does not apply to exported services.

Conclusion: In favour of the assessee. The bar of unjust enrichment was held inapplicable.

Final Conclusion: The impugned orders were set aside and the appeals were allowed, granting consequential relief in accordance with law.

Ratio Decidendi: Where the contractual recipient of telecom roaming services is the foreign telecom provider located outside India and consideration is received from that foreign provider, the service is export of service and refund arising from such export is not defeated by unjust enrichment.

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