Unjust enrichment does not bar service tax refund when cogent evidence shows the tax burden was not passed on.

Refund of service tax is not barred by unjust enrichment where the claimant proves that the tax incidence was not passed on to the recipient. The appellant relied on invoices, ledger entries, journal reversals, a Chartered Accountant's certificate and an affidavit from the recipient to show that the amount remained receivable and had been paid from its own pocket. On that evidence, the lower authorities were found to have ignored the material properly, and the refund denial was held unsustainable. The operative principle is that refund is admissible when cogent evidence establishes that the burden of tax was not transferred to another party.

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Issues: Whether refund of service tax was barred by unjust enrichment when the assessee claimed that the tax burden had not been passed on to the customer.

Analysis: The appellant established through invoices, ledger entries, journal reversals, a Chartered Accountant's certificate, and an affidavit from the recipient that the service tax amount had not been recovered from the customer and remained shown as receivable. The lower authorities had not appreciated this evidence in its proper perspective. As the tax was found to have been paid out of the appellant's own pocket and the incidence was not passed on, the bar of unjust enrichment did not apply.

Conclusion: The appellant was entitled to refund of the service tax amount.

Final Conclusion: The refund denial was unsustainable, and the assessee succeeded in obtaining refund with consequential relief.

Ratio Decidendi: Refund is admissible where the claimant proves with cogent evidence that the incidence of tax was not passed on to the recipient.

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