Service tax refund claims remain subject to limitation and unjust enrichment, with excess collection passed on defeating repayment.

Refund of service tax had to be examined under the statutory refund provision made applicable to such payments. The claim was partly filed beyond the prescribed limitation period and was therefore not entertainable to that extent. The remaining amount was treated as service tax collected and deposited by the assessee, showing that the incidence had been passed on. On that basis, refund was barred by the doctrine of unjust enrichment embodied in Section 11B, and the rejection of refund was upheld.

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Issues: Whether the refund claim of service tax payment was maintainable under Section 11B of the Central Excise Act, and whether the claim was barred by limitation and hit by unjust enrichment.

Analysis: The refund application had to be dealt with only in terms of the statutory refund provision made applicable to service tax payments. The claim was partly beyond the prescribed time limit and that portion was therefore not entertainable. The balance amount was found to have been collected by the assessee as service tax and deposited, showing that the incidence had been passed on. A refund in such circumstances would confer an unjust benefit and was impermissible under the doctrine of unjust enrichment embodied in Section 11B.

Conclusion: The refund rejection was upheld. The claim was not sustainable to the extent it was time-barred, and the remaining claim was barred by unjust enrichment.

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