Refund claims must be tested on taxability, limitation and unjust enrichment before rejection; unverified reimbursement requires fresh adjudication.

A refund claim under section 11B must be examined on its own merits by first determining whether the service was taxable under the Finance Act, 1994, including the relevance of the service provider's Indian office, the recipient in India and delivery of processed data in India. The claim also requires a proper inquiry into limitation and unjust enrichment, including verification of whether the tax amount was reimbursed. Where these material facts are not properly examined, the matter calls for fresh adjudication after evidence and hearing.

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Issues: (i) Whether the refund claim required fresh adjudication on the question of levy and liability to service tax, including the relevance of the territorial location of the service and the charging provisions. (ii) Whether the claim could be rejected without proper examination of limitation and unjust enrichment, including verification of reimbursement of the tax amount.

Issue (i): Whether the refund claim required fresh adjudication on the question of levy and liability to service tax, including the relevance of the territorial location of the service and the charging provisions.

Analysis: The refund application had to be examined on its own merits under section 11B of the Central Excise Act as applicable to service tax. The adjudicating authority was required to determine whether the service was taxable on first principles under the charging provisions of the Finance Act, 1994, rather than proceed only on the basis of the show-cause notice or the Maritime Zones notifications. The record showed that the service provider had an Indian office, the service recipient was in India, and the processed data were delivered in India, but these aspects had not been properly analysed in relation to service-tax levy.

Conclusion: The earlier orders on levy could not be sustained and the matter had to be reconsidered afresh.

Issue (ii): Whether the claim could be rejected without proper examination of limitation and unjust enrichment, including verification of reimbursement of the tax amount.

Analysis: The authority was obliged to examine whether the refund claim was within limitation and whether it was barred by unjust enrichment. On the existing record, the question of reimbursement of the tax amount from ONGC to the service provider remained unclear and required verification. The lower authorities had not conducted the necessary factual inquiry on these aspects, and the appellate record did not establish that the claim could be finally rejected without such inquiry.

Conclusion: The claim had to be sent back for verification and fresh decision on limitation and unjust enrichment.

Final Conclusion: The orders of the lower authorities were set aside and the refund matter was remanded for fresh adjudication after giving the claimant an opportunity to produce evidence and be heard.

Ratio Decidendi: A refund claim under section 11B must be adjudicated on the basis of the claim itself by determining taxability, limitation, and unjust enrichment, and where material facts such as reimbursement remain unverified, the proper course is remand for fresh adjudication.

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