Service tax refund on unrealised invoices upheld in principle, with entitlement depending on proof that consideration was not received

Service tax refund on billed amounts not actually received was held not to be denied merely because the debt had not been written off. The analysis treated service tax as payable, on these facts, only on receipt of monetary consideration, and distinguished central excise principles where liability arises on manufacture or removal. Section 11B and unjust enrichment were considered, but the refund claim had to turn on verification of whether the consideration was in fact received. The claim was therefore maintainable in principle, subject to that factual verification, and the appeal was not successful.

---

---

Issues: Whether refund of service tax paid on billed amounts that were not actually received could be denied on the ground that the amounts had not been written off and that the bar of unjust enrichment under section 11B applied.

Analysis: Service tax, on the facts of the case, was treated as becoming payable only on receipt of monetary consideration. The Court distinguished the position from central excise, where duty liability arises on manufacture and removal, and held that the revenue's insistence on prior write-off was not a necessary condition for refund when the consideration itself had not been received. The applicability of section 11B was considered, but it was held that the service tax setting was materially different and that the refund claim had to be examined by verifying whether the amount had in fact been received.

Conclusion: Refund could not be denied merely because the debt had not been written off, and the claim was maintainable if the taxable consideration had not been received.

Final Conclusion: The appeal was not successful, and the refund claim in principle stood sustained subject to verification of receipt of the consideration.

---