Appellant's Refund Claim Granted on Unjust Enrichment Issue

The appellant's refund claim, initially rejected for unjust enrichment, was granted upon establishing that the service tax credit was not availed, with recoverable service tax shown in their balance sheet. The appellant's consistent selling prices pre and post job work, along with the reversal of the service tax credit, supported the argument against unjust enrichment. Following the precedent set in the Hello Minerals Water case, the court found in favor of the appellant, setting aside the lower authorities' decision and allowing the appeal with consequential relief.

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Issues:
Refund claim rejection based on unjust enrichment.

Analysis:
The appellant, engaged in manufacturing medicaments, had goods manufactured on loan licensee who paid service tax under Business Auxiliary Services. Subsequently, it was determined that the activity amounted to manufacture, not subject to service tax. The appellant reversed the cenvat credit with interest and filed a refund claim, rejected for unjust enrichment by lower authorities. The appellant argued non-availment of credit and maintained selling price consistency post-job work, passing unjust enrichment. The appellant's books and CA certificate supported this. The respondent contended lack of evidence on duty burden not passed to buyers. Upon hearing both sides, it was found that the final goods' price remained unchanged pre and post job work, and the appellant had reversed the service tax credit. Citing the Hello Minerals Water case, it was held that the appellant did not avail the credit, showing recoverable service tax in their balance sheet, passing the unjust enrichment test. Consequently, the refund was granted, and the impugned order was set aside, allowing the appeal with consequential relief.

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