Unjust enrichment in service tax refund claims failed where tax was not separately collected from educational institutions.

Refund of service tax paid on construction services for educational institutions was allowed because the record showed no separate collection of tax from the recipients. The construction activity was treated as exempt under the applicable Board circular for buildings used by institutions established solely for educational purposes, and the Revenue failed to prove that the tax burden had been passed on. In the absence of any bill entry or contractual term indicating recovery of tax from the educational institutions, no presumption of unjust enrichment arose. The refund of excess service tax, with interest, was therefore payable.

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Issues: Whether the appellant was entitled to refund of service tax paid on construction services rendered for educational institutions, and whether the claim was barred by unjust enrichment.

Analysis: The evidentiary record, including bills, agreements, returns, affidavit and chartered accountant's certificate, showed that service tax had not been collected separately from the service recipients. The construction activity was treated as exempt in view of the applicable Board circular for constructions used by institutions established solely for educational purposes. The Revenue did not produce material to establish that the incidence of tax had been passed on to the educational institutions. In the absence of any specific bill entry or contractual stipulation showing collection of tax from the recipients, no presumption of passing on the burden could be drawn.

Conclusion: The refund claim was not hit by unjust enrichment and the appellant was entitled to refund of the excess service tax paid along with interest.

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