Unjust enrichment in service tax refund fails where certified evidence shows the tax burden was not passed on

Refund of service tax, interest and penalty was held not to be barred by unjust enrichment where the appellant relied on a Chartered Accountant's certificate stating that the duty incidence had been borne by it and not passed on to any other person. The Department did not discuss or dispute the certificate's authenticity, and it was accepted as valid proof that the burden had not been shifted. On that basis, the refund claim succeeded and consequential relief followed.

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Issues: Whether the refund claim of service tax, interest and penalty was barred by unjust enrichment.

Analysis: The appellant was held not liable to pay service tax in view of Circular No. 108/02/2009-ST dated 29/01/2009. The refund was rejected only on the ground of unjust enrichment. The appellant produced a Chartered Accountant certificate stating that the incidence of duty had been borne by the appellant and had not been passed on to any other person. The certificate was neither discussed nor its authenticity disputed by the Department. In such circumstances, the certificate was treated as valid proof that the burden had not been shifted.

Conclusion: The refund claim was not hit by unjust enrichment and the appeal was allowed with consequential relief.

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