Refund of tax paid without authority remains admissible where statutory conditions are met and burden was not passed on.

Amounts paid as service tax without authority of law, or under a mistaken belief of liability, remain refundable where the statutory conditions are met. The refund claim was held to be within limitation and otherwise admissible because the tax had been borne by the assessee and not passed on. Reliance on a later contrary view was rejected, as the applicable precedent recognized that mere payment as tax does not justify departmental retention of an unauthorized sum. Once the refund was sanctioned, recovery could not be pursued on the same facts. The refund sanction was therefore valid and the challenge to it failed.

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Issues: Whether the refund of service tax, paid without authority and sought after remand, was rightly sanctioned and whether the appellate authority was justified in setting aside the refund on the basis of later decisions.

Analysis: The refund claim was examined after remand and found to be within limitation and otherwise admissible. The order sanctioning refund proceeded on the footing that the tax had been paid in excess and that the assessee had also borne the excess burden without passing it on. The appellate authority's reliance on a later view that earlier precedent was not good law was not accepted, as the applicable jurisdictional precedent recognized refund of amounts paid under a mistaken notion and held that mere payment did not alter the character of the transaction or justify retention by the Department. The Tribunal also noticed that once refunded, recovery could not be pursued as tax due on the facts of the case.

Conclusion: The refund sanction was valid and the order setting it aside was unsustainable.

Final Conclusion: The assessee was entitled to retain the sanctioned refund and the Revenue's challenge to that sanction failed.

Ratio Decidendi: Amounts paid without authority of law, or under a mistaken notion of liability, remain refundable when the statutory conditions are satisfied, and the Department cannot retain or recover such sums merely because they were originally paid as tax.

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