2026-VIL-1100-CESTAT-AHM-ST
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SERVICE TAX CESTAT Cases

Service Tax - Admissibility of Refund claim when Service Tax is deposited under Different Registration Codes of same entity - Whether a refund claim can be rejected on the technical ground that the amount was deposited under a different registration code than the one in which the refund application is filed, when the entire amount has been duly credited to the government account and both codes pertain to the same entity - HELD – The substantive refund benefits cannot be denied due to technical errors in registration codes or wrong accounting entries, provided the money has been deposited into and credited by the government exchequer. The principles laid down in Devang Papers Mills case establish that when Government dues are deposited, whether under a wrong accounting code or different registration code, the assessee is not required to pay the tax again. The Department itself issued a single consolidated demand notice and assessment order treating the entity as unified, and therefore cannot subsequently fragment the entity into separate units merely to deny refund. The split of deposits under two codes is merely an internal administrative arrangement for maintaining different units of the same residential complex and does not constitute dual liability or fraud. Where the tax amount due has been deposited with the Government exchequer, discrepancies in registration codes are matters of internal Departmental adjustment and can be remedied through accounting entries without imposing fresh demand. The technical bookkeeping errors cannot override the substantive statutory right of the assessee to claim refund of amounts wrongly held to be payable - The refund of the entire amount is allowed, and the rejection of the portion claimed under the different registration code is set aside – The appeal is allowed - Applicability of Bar of Unjust Enrichment to amounts deposited during Investigation - Amounts were deposited during investigation proceedings by the assessee, the underlying demand was subsequently set aside on merits by the Appellate Commissioner - Revenue invoked the doctrine of unjust enrichment to deny refund of the deposited amounts - Whether the principle of unjust enrichment under Section 11B of the Central Excise Act can be applied to bar refund of amounts deposited during investigation after the underlying demand has been set aside on merits - HELD - The principle of unjust enrichment cannot be mechanically applied to amounts deposited during investigation proceedings. Such deposits made to secure the revenue's interest during proceedings are in the nature of pre-deposits and do not possess the characteristics of self-assessed tax or duty passed on in commercial invoices. Once the underlying demand is set aside on merits, the retained money loses any character or colour of tax, and the State cannot retain money of the assessee without authority of law - The unjust enrichment bar applies only when tax or duty has been actually paid and the incidence thereof has been passed on to third parties. Where the service tax itself was not leviable due to the principle of mutuality, there is no question of the assessee passing on the tax incidence to members. The onus of maintaining seamless internal verification records lies with the department, and once payment is verified from the exchequer perspective, refund must follow as a necessary consequence - When no tax was leviable on the assessee, the bar of unjust enrichment is entirely inapplicable - The invocation of unjust enrichment principle to deny refund is rejected, and the full refund amount is ordered along with applicable interest.
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