Refund of excess service tax on works contract services upheld where records proved payment and unjust enrichment was not established.

Refund of excess service tax on works contract services was sustained where contemporaneous records, including the work order, tax statements, VAT records and the certificate of the contracting entity, matched on dates, amounts and nature of work, and the ST-3 return tallied with the refund claim; the denial for want of proof was therefore unsustainable. The bar of unjust enrichment did not apply because the service tax under reverse charge was deducted in the bills, showing that the incidence of tax was borne by the claimant and not passed on to another person. The rejection of refund was set aside and consequential relief was granted.

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Issues: (i) Whether the refund claim of excess service tax paid on works contract services was substantiated by the records produced; (ii) Whether the refund was barred by unjust enrichment.

Issue (i): Whether the refund claim of excess service tax paid on works contract services was substantiated by the records produced.

Analysis: The work order, Form 16A/26AS, VAT-41 and the certificate issued by the Rajasthan Housing Board matched on dates, amounts and the nature of work. The records showed that the receipts during the relevant period were against the same agreement and that no other taxable services were rendered in that period. The ST-3 return downloaded from the system tallied with the refund application, including gross receipt, tax payable and tax deposited, and the discrepancy in registration number was satisfactorily explained.

Conclusion: The refund claim was duly substantiated and the denial on the ground of lack of proof was unsustainable.

Issue (ii): Whether the refund was barred by unjust enrichment.

Analysis: The service tax payable by the Rajasthan Housing Board under reverse charge was deducted in the bills, showing that the incidence of tax was borne by the appellant. Since the tax burden was not passed on to another person, the bar of unjust enrichment did not apply.

Conclusion: The refund was not hit by unjust enrichment and was admissible to the appellant.

Final Conclusion: The rejection of refund was set aside and the refund of excess service tax was allowed with consequential relief.

Ratio Decidendi: A refund of excess tax paid on works contract services cannot be denied when contemporaneous documents substantiate the payment and the claimant has borne the incidence of tax without passing it on to another person.

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