2026-VIL-1584-CESTAT-HYD-ST
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SERVICE TAX CESTAT Cases

Service Tax – Refund of service tax already collected and deposited, Unjust Enrichment - Burden of Proof on Claimant – Appellant entered into contract with Transmission Corporation of Andhra Pradesh Ltd for laying, jointing, termination, testing and commissioning of underground electrical cables - appellant discharged Service Tax on advance amount. Subsequently relying on CBEC Circular No. 123/5/2010-TRU clarifying that laying electrical cables between grids, sub-stations and transformer stations was not taxable, appellant claimed refund of Service Tax and interest – Whether a service provider who has collected Service Tax from the service recipient on the basis of a contract price expressly stated to be inclusive of taxes can claim refund of such Service Tax merely by establishing that the activity was later clarified or determined to be non-taxable – HELD – Every refund claim under Section 11B of the Central Excise Act is subject to the doctrine of unjust enrichment; the claimant is required to establish that the incidence of the tax for which refund is sought has not been passed on to any other person; the burden of proving this fact squarely rests on the claimant; a contract stipulation that the price is inclusive of Service Tax supports the finding that the contractual consideration included the tax burden - The statutory presumption regarding passing on of tax incidence cannot be rebutted merely by making an assertion or by raising a legal contention that the activity was subsequently found to be non-taxable. The claimant must produce relevant primary documents including invoices, ledgers, balance sheets and accounting records to establish that the incidence of tax was not passed on or to show that the contract price was reduced or that a credit note was issued to the service recipient – The Notification No. 45/2010-ST cannot be read as conferring an unconditional right for refund of Service Tax already collected and deposited. The notification cannot be construed as authorizing a service provider to recover tax from the recipient and thereafter obtain refund from the Government - The appellant may be correct in contending that the subject activity was covered by the clarification relating to cable-laying or by the provisions concerning transmission of electricity, that finding alone is insufficient to sanction the refund. The appellant was required to cross the statutory bar of unjust enrichment, which it has failed to do – Refund claim dismissed as barred by unjust enrichment due to failure to prove non-passing of tax incidence to service recipient – The appeal is dismissed
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