Unjust enrichment in service tax refund: refund allowed where evidence showed the tax burden was not passed on to recipients.

A service tax refund claim was examined on the doctrine of unjust enrichment, with the key question being whether the tax incidence had been passed on to the service recipient. The unchanged service pricing before, during and after the tax period, the absence of any service tax component in the invoices, and a Chartered Accountant's certificate together provided sufficient evidence that the burden had not been recovered from recipients. On that totality of evidence, unjust enrichment did not apply, and the refund was held admissible in favour of the assessee.

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Issues: Whether the refund claim of service tax was barred by the doctrine of unjust enrichment on the ground that the incidence of tax had been passed on to the service recipient.

Analysis: The value charged for the services remained the same before, during and after the period when service tax was paid, the invoices did not reflect any service tax component, and a Chartered Accountant's certificate supported the claim that the tax burden had not been recovered from the recipients. Though unchanged pricing by itself is not conclusive, the surrounding facts provided sufficient evidentiary weight to discharge the claimant's onus. The doctrine of unjust enrichment therefore did not defeat the refund.

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

Final Conclusion: The impugned order was set aside and the appeal was allowed with consequential relief.

Ratio Decidendi: In a refund claim, unjust enrichment is not attracted where the claimant, on the totality of evidence, establishes that the tax incidence was not passed on to the service recipient.

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