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Issues: Whether the assessee was entitled to refund of service tax in view of the bar of unjust enrichment, and whether issue of credit notes after payment could establish that the incidence of tax had not been passed on.
Analysis: Refund under Section 11B of the Central Excise Act, 1944 is available only if the claimant establishes both payment of the duty and that its incidence has not been passed on to any other person. The Court relied on the governing principle that the burden to prove absence of unjust enrichment lies on the claimant. The record showed that the assessee relied mainly on credit notes and ledger entries, while the finding that the burden had not been passed on beyond the immediate client was not established. The appellate finding allowing refund did not displace the earlier factual finding that the incidence of tax could still have been passed on further down the chain.
Conclusion: The refund claim was barred by unjust enrichment and the assessee failed to discharge the burden of proving that the incidence of service tax had not been passed on.
Ratio Decidendi: A refund claim under Section 11B succeeds only when the claimant affirmatively proves that the tax incidence has not been passed on to any other person; post-payment credit notes, without such proof, do not by themselves overcome unjust enrichment.
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