Unjust enrichment does not bar service tax refund when contractual commission was inclusive of tax and burden was not passed on.

Refund of Service Tax was held not to be barred by unjust enrichment where the contractual commission was fixed as inclusive of all statutory levies and the asset management companies certified that no separate Service Tax was payable. On those facts, the tax incidence was treated as having been borne out of the consolidated consideration received by the assessee, rather than passed on to customers. Applying the settled principle that a refund is not defeated when the disputed levy formed part of an inclusive price and was not separately recovered, the refund claim was sustained and the departmental appeal failed.

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Issues: Whether the refund of Service Tax was barred by unjust enrichment on the footing that the tax incidence had been passed on to the asset management companies.

Analysis: The commission payable to the respondent was fixed by the asset management companies as an amount inclusive of all statutory levies. The companies certified that they were under no obligation to pay Service Tax over and above the agreed commission. On that basis, the disputed tax was found to have been borne out of the consolidated consideration received by the respondent, and not separately recovered from the customers. The controversy was treated as covered by the settled position that where the price is fixed as inclusive of duties and the disputed levy is later held not payable, refund is not defeated by unjust enrichment.

Conclusion: The refund claim was not hit by unjust enrichment and was rightly allowed in favour of the assessee.

Final Conclusion: The department's appeal failed, and the refund directed by the appellate authority was sustained.

Ratio Decidendi: Where the contractual consideration is inclusive of the disputed tax and the assessee establishes that the tax burden was not separately passed on, refund cannot be denied on the ground of unjust enrichment.

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