2026-VIL-1265-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Unjust Enrichment, Refund Claim amount shown as receivable in Balance Sheet - Appellant manufacturer of medicaments availed CENVAT credit on input services and later reversed the same in RG-23A Part-II -. Tribunal had allowed the CENVAT credit and appellant filed refund claim. Dept rejected refund claim on ground that reversed CENVAT credit was treated as revenue expenditure in financial accounts implying burden of duty was passed on to customer - Whether refund claim is hit by doctrine of unjust enrichment under Section 11B of CEA, 1944 - HELD - The admitted facts are that appellant had claimed CENVAT credit, reversed the same and only after decision of Tribunal holding them eligible to claim CENVAT credit they filed refund claim. The duty reversed by appellant is debited to profit and loss account or shown as receivable in balance sheet. At time of reversal of CENVAT credit no invoice was raised to recover reversed amount from customers and therefore burden of reversal of CENVAT credit was borne by appellant themselves - The CA Certificate is good evidence to show that disputed duty amount had not been collected from customers and said certificate could not have been sidelined without production of any evidence to show that certificates were wrong. The method of accounting followed by assessee does not impact admissibility of refund and cannot be made basis to hold that incidence of duty had passed - The ratio laid down in Solar Pesticide case is distinguishable as it concerned duty paid on raw material which is added to price of finished goods, whereas in present case incidence of duty has not been passed on by appellant to its customers - The refund claim is not hit by unjust enrichment and the appeal is allowed
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