Refund under protest and unjust enrichment: contemporaneous evidence excluded limitation and supported refund eligibility.

Refund paid under protest was treated as non-voluntary where the assessee produced contemporaneous evidence that service tax had been remitted under protest because recipients were not paying tax. On that basis, the proviso to Section 11B excluded the one-year limitation period, so the refund claim was held to be in time. The assessee also showed that the tax had not been collected from customers, which negatived unjust enrichment. The rejection of refund was therefore set aside in favour of the assessee.

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Issues: Whether the refund claim was barred by limitation under Section 11B of the Central Excise Act, 1944 and whether the doctrine of unjust enrichment prevented grant of refund.

Analysis: The appellant had consistently maintained that service tax was being paid under protest and had produced a letter dated 25.11.2005 expressly recording that the tax was remitted under protest because the service recipients were not paying service tax. This was treated as sufficient proof that the payments were not voluntary. On that basis, the proviso to Section 11B was held to exclude the one-year limitation period. The appellant also produced material showing that service tax had not been collected from customers, which negatived the plea of unjust enrichment.

Conclusion: The refund claim was held to be within time and not hit by unjust enrichment, and the rejection of refund was set aside in favour of the assessee.

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