Refund limitation and unjust enrichment: remanded claims remain timely when tax on non-taxable activity was not passed on.

A refund application originally filed and remanded for reconsideration does not become a fresh claim merely because the claimant later seeks implementation of the remand. Where service tax was inadvertently paid on a non-taxable activity, the limitation period under Section 11B was stated to be inapplicable. The notes further state that unjust enrichment is rebutted when reliable certificates from the service recipient establish that no service tax was paid to the claimant and the tax incidence was therefore not passed on. On these stated grounds, the claimant was entitled to refund with interest.

---

---

Issues: (i) Whether the refund claim was barred by limitation; (ii) Whether the claimant had overcome the bar of unjust enrichment.

Issue (i): Whether the refund claim was barred by limitation.

Analysis: The original refund application had been filed in December 2008 and the matter stood remanded for reconsideration. The subsequent communication in 2023 did not constitute a fresh refund claim. Since service tax had been paid inadvertently on a non-taxable activity, the limitation prescribed under Section 11B of the Central Excise Act, 1944 was held inapplicable.

Conclusion: The refund claim was filed within time, in favour of the assessee.

Issue (ii): Whether the claimant had overcome the bar of unjust enrichment.

Analysis: Certificates issued by the service recipient established that no service tax had been paid to the claimant. This evidence showed that the incidence of tax had not been passed on; the contrary precedent was distinguishable because evidence of this nature had not been produced in that matter.

Conclusion: The bar of unjust enrichment was overcome, in favour of the assessee.

Final Conclusion: The claimant is entitled to refund of the service tax paid inadvertently, with interest at 12% per annum.

Ratio Decidendi: A refund application originally filed and remanded for reconsideration does not become a fresh time-barred claim merely because the claimant later seeks implementation of the remand; unjust enrichment is displaced where reliable evidence establishes that the tax incidence was not passed on.

---