Unjust enrichment bars service tax refund where records show the tax burden was passed on to clients.

Refund of service tax was denied because the records showed that the appellant had collected the tax from clients, attracting the doctrine of unjust enrichment under Section 11B(2). The authority examined books of account, contract documents, statements of account and invoices for the relevant building contracts and found that the incidence of tax had been passed on to service recipients. A Chartered Accountant's certificate to the contrary was rejected as inconsistent with those materials. On those findings, the refund was held inadmissible and the rejection sustained.

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

Analysis: The lower authority had examined the books of account, contract documents, statements of accounts and invoices relating to the relevant building contracts and found that the appellant had collected service tax from its clients. The Chartered Accountant's certificate relied upon by the appellant was found to be contrary to those findings. On that basis, the appellate authority concluded that the bar under Section 11B(2) applied and that the refund claim could not be sanctioned.

Conclusion: The refund claim was correctly held to be hit by the doctrine of unjust enrichment and was not admissible.

Final Conclusion: The appeal failed and the rejection of the refund was sustained.

Ratio Decidendi: A refund claim is not admissible where the factual findings show that the incidence of tax has been passed on to the customers, notwithstanding a contrary certificate.

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