Double recovery of service tax on the same taxable service entitles the payer to refund despite available CENVAT credit.

Service tax recovered twice on the same taxable service could not be retained, because the liability had already been discharged once and the later adjustment from the security deposit and bills resulted in double recovery. The availability of CENVAT credit did not justify withholding the excess amount. Refund was therefore due, and the rejection order was unsustainable. The writ petition succeeded, the impugned order was quashed, and the authorities were directed to facilitate refund of the excess tax collected.

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Issues: Whether the petitioner was entitled to refund of service tax recovered once from his bills and again from his security deposit for the same taxable service, and whether the rejection of refund in Ext.P14 was sustainable.

Analysis: The petitioner had already discharged the service tax liability on the service performed by him. The same service tax was thereafter adjusted from his security deposit and bills by the Airport Authority of India and remitted to the department. On the facts, this amounted to payment of tax twice on the same service. The Court held that there was no justification for retaining the amount, and the availability of CENVAT credit did not alter the fact that the petitioner was entitled to refund of the excess amount collected. The decision was also supported by the principle that tax cannot be retained when the same liability has already been discharged and recovered again for the same transaction.

Conclusion: The petitioner was entitled to refund, and Ext.P14 rejecting the claim was liable to be set aside.

Final Conclusion: The writ petition succeeded, the impugned order was quashed, and the authorities were directed to facilitate refund so that double recovery did not stand.

Ratio Decidendi: Where service tax is recovered twice in relation to the same taxable service, the excess amount cannot be retained and refund must follow.

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