Unjust enrichment and works contract classification barred refund where the taxpayer could not prove tax burden was not passed on.

Refund claims in service tax matters must be supported by affirmative proof that the tax burden was not passed on; absent complete contractual records, tax payment details and returns, the bar of unjust enrichment applies. The document also states that construction and development activities involving both materials and services fall within works contract services, and refund proceedings cannot be used to re-characterise a duly paid tax liability. On that basis, the impugned order was sustained and refund was denied.

---

---

Issues: (i) whether the refund claim was barred by the doctrine of unjust enrichment; (ii) whether the services executed under the contracts were correctly treated as works contract services and, therefore, not eligible for refund.

Issue (i): whether the refund claim was barred by the doctrine of unjust enrichment.

Analysis: The appellant did not produce the complete contractual record, G-schedule, tax payment particulars, or ST-3 returns to show that the incidence of service tax had not been passed on. The contract value was stated to be inclusive of taxes, and the record did not establish that the tax burden was retained by the appellant. In refund matters, the claimant must affirmatively prove that the burden was not transferred to the recipient, failing which the bar of unjust enrichment applies.

Conclusion: The refund claim was rightly held to be barred by unjust enrichment, against the assessee.

Issue (ii): whether the services executed under the contracts were correctly treated as works contract services and, therefore, not eligible for refund.

Analysis: The work orders showed construction and development activities involving both materials and services, which fell within the statutory definition of works contract. The applicable tax regime and the deduction mechanism under the relevant exemption and reverse-charge notifications were also noted. On that basis, the Tribunal found that the appellant had correctly paid service tax on the services rendered and could not seek refund by re-characterising the liability in refund proceedings.

Conclusion: The services were correctly treated as works contract services and the appellant was not entitled to refund, against the assessee.

Final Conclusion: The impugned order was sustained and the appeal failed.

Ratio Decidendi: Refund cannot be granted unless the claimant proves non-passing of the tax burden, and refund proceedings cannot be used to alter the tax position already determined on the basis of the applicable assessment.

---