Service tax refund on independent residential house construction allowed where the tax burden was not passed on and unjust enrichment did not apply.

Refund of service tax paid on construction of independent residential houses was held admissible because the construction consisted of separate, independent houses with distinct access, electricity and water connections and was treated as outside the taxable category relied on by the Department. The objection of unjust enrichment failed because the Housing Board had separately borne its share of tax through deduction and deposit under reverse charge, showing that the incidence was not passed on to the claimant. The same reasoning applied to excess tax paid under the same work order, and refund was also allowed for that amount. The refund claim succeeded in full and consequential relief followed.

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Issues: (i) Whether refund of service tax paid on construction of independent residential houses was admissible and barred by unjust enrichment. (ii) Whether refund of excess service tax paid on construction covered by the same work order was admissible and barred by unjust enrichment.

Issue (i): Whether refund of service tax paid on construction of independent residential houses was admissible and barred by unjust enrichment.

Analysis: The construction related to individual and independent residential houses with separate access, electricity and water connections. Such construction was treated as outside the taxable category relied upon by the Department and the appellant had also borne the incidence of tax because the Housing Board had deducted and deposited its share under reverse charge. The prior Tribunal decision on the same issue was followed.

Conclusion: Refund was admissible and the bar of unjust enrichment did not apply, in favour of the assessee.

Issue (ii): Whether refund of excess service tax paid on construction covered by the same work order was admissible and barred by unjust enrichment.

Analysis: The excess tax was paid beyond the liability actually attributable to the work, while the Housing Board had separately borne its own share of tax through deduction under reverse charge. The earlier Tribunal ruling on the identical work order was followed, and the same reasoning was applied to reject the objection based on unjust enrichment.

Conclusion: Refund was admissible and the bar of unjust enrichment did not apply, in favour of the assessee.

Final Conclusion: The refund claim succeeded in full and the order of the Commissioner (Appeals) was set aside with consequential relief.

Ratio Decidendi: Where service tax is paid on construction that is not taxable as claimed and the incidence of tax is shown to have been borne by the claimant, refund cannot be denied on the ground of unjust enrichment.

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