Service tax refund on exempt installation services allowed where no separate tax was recovered and unjust enrichment was not established.

Refund of service tax paid on erection, commissioning and installation services was held admissible where the services were stated to be exempt under the relevant notifications. The work orders showed that contractual consideration was inclusive of tax, and no separate service tax was recovered from the recipient. On those facts, the doctrine of unjust enrichment did not bar refund because passing on of the tax burden could not be inferred merely from an inclusive price arrangement. The Revenue's objection on unjust enrichment therefore failed.

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Issues: Whether the assessee was entitled to refund of service tax on the ground that the taxable service was exempt and, in the facts of the case, the doctrine of unjust enrichment barred the refund claim.

Analysis: The refund claim arose from service tax paid on erection, commissioning and installation services, which were stated to be exempt under the relevant exemption notifications. The work orders indicated that the contractual consideration was inclusive of taxes, but no separate service tax had been recovered from the recipient. Following the settled principle that where the agreed consideration is inclusive of tax and there is no separate collection from the customer, it cannot be inferred, without more, that the tax burden was passed on so as to attract unjust enrichment, the refund could not be denied on that ground.

Conclusion: The refund was admissible and the Revenue's objection based on unjust enrichment failed.

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