Unjust enrichment does not bar refund where the service recipient bore the tax burden and is identifiable.

A refund of service tax paid on works contract service was examined against the bar of unjust enrichment. The Tribunal applied the principle reflected in Section 11B(2)(e) of the Central Excise Act, 1944 and noted that, where the tax burden has been borne by the service recipient and the recipient is identifiable, the refund should not be retained in the Consumer Welfare Fund. It must instead be sanctioned for direct payment to that recipient. The article further notes that the refund was treated as admissible, with consequential relief including interest after three months from the refund application.

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Issues: Whether the refund claim arising from service tax paid on works contract service was barred by unjust enrichment and, if admissible, whether the refund was to be credited directly to the service recipient.

Analysis: The refund dispute had already been settled in the earlier round, where the claim was held not to be time-barred and the Revenue's challenge had been dismissed. Relying on the earlier decision and on the principle reflected in Section 11B(2)(e) of the Central Excise Act, 1944, the Tribunal applied the rule that where the tax burden has been borne by the recipient and the recipient is identifiable, the refund is not to be retained in the Consumer Welfare Fund but is to be sanctioned for payment directly to the service recipient.

Conclusion: The refund claim was not hit by unjust enrichment and was required to be paid directly to the service recipient.

Final Conclusion: The appeal succeeded and the assessee was held entitled to refund with consequential relief, including interest after three months from the date of the refund application.

Ratio Decidendi: Where the tax burden is borne by the service recipient and the recipient is identifiable, refund cannot be denied on unjust enrichment and must be sanctioned for direct payment to the recipient.

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