Sodexo India Services Private Limited Vs Commissioner of CGST and Central Excise (CESTAT Mumbai)
Summary: The Mumbai Bench of the Customs, Excise and Service Tax Appellate Tribunal, in Sodexo India Services Private Limited v. Commissioner of CGST and Central Excise, Mumbai West and connected appeals, decided ten cross-appeals concerning service tax refunds for housekeeping and canteen/outdoor catering services supplied to educational institutions. By Final Order No. A/86223–86232/2026, pronounced on 8 October 2026, the Bench comprising S.K. Mohanty, Member (Judicial), and Sanjiv Srivastava, Member (Technical), dismissed the five assessee appeals and allowed the five Revenue appeals. The decision addresses the finality of self-assessments, the attempt to compute refund limitation from a subsequent Board clarification, and the requirement to establish that the incidence of tax was not passed on to another person.
The dispute arose from five orders-in-original dated 30 September 2014 rejecting refund claims covering different months between July 2012 and September 2013. The order’s refund table records a grand total of Rs.5,91,83,254. The assessees had collected and paid service tax on the services and subsequently claimed that the supplies qualified as auxiliary educational services exempt under Notification No.25/2012-ST dated 20 June 2012. They relied on Circular No.172/7/2013-ST dated 19 September 2013, which clarified the exemption for auxiliary educational services, including housekeeping and canteen services. They also stated that credit notes had been issued to the educational institutions for the service tax originally collected.
By the common appellate order dated 5 March 2018, the Commissioner (Appeals) sanctioned Rs.1,20,95,023 for housekeeping services with consequential relief to the appellants. For canteen/outdoor catering services, the Commissioner sanctioned Rs.4,70,89,131 but directed that amount to the Consumer Welfare Fund under Section 11B of the Central Excise Act, 1944, applied to service tax through Section 83 of the Finance Act, 1994. The Commissioner considered the claims within time by counting one year from the Board’s clarification. The Revenue challenged the relief, including Rs.53,66,697 of the housekeeping refund that it specifically contended was time-barred. The assessees challenged the adverse unjust-enrichment finding concerning the catering refunds.
The assessees argued that their representation to the Board and the subsequent clarification justified calculating limitation from 19 September 2013, rather than from the original tax payments. Alternatively, they submitted that the payments should be regarded as made under protest because they had sought clarification. They relied on Tamil Nadu Petro Products Ltd. and In-House Productions Ltd. on limitation. On unjust enrichment, they relied on credit notes and an independent chartered accountant’s certification, contending that the burden had ultimately been borne by them. They also invoked Rule 6 of the Service Tax Rules, 1994 and Instruction No.341/34/2010-TRU dated 31 March 2011, and sought to distinguish the Supreme Court’s Addison decision as relating to excise duty.
The Tribunal rejected the attempt to treat the Board clarification as a substitute for statutory proceedings against the assessments. It noted that the exemption notification operated from 1 July 2012, that service tax had been collected and deposited, and that ST-3 returns had been filed. The representation was made on 12 March 2013. A later clarificatory circular could explain the legal position but could not itself modify the self-assessments that had attained finality. The Board was not the prescribed appellate authority, and a representation addressed to it was not an appeal under Section 85 of the Finance Act, 1994. Accordingly, neither the representation nor the clarification supplied the missing modification of the self-assessments.
Following ITC Ltd., reported at 2019 (368) ELT 216 (SC), and the authorities discussed in Eurotex Industries and Exports Ltd., the Tribunal held that a self-assessment is an assessment and that a refund claim cannot be entertained while the assessment supporting the payment remains unchanged. Refund proceedings are in the nature of execution proceedings; the refund authority cannot use them to undertake a fresh assessment or review the merits of an existing one. The Bench explained that the principle was relevant to service tax as well, referring to BT (India) Pvt. Ltd., R C Gupta and Jagdamba Phosphate. It also referred to Krish Fabrics India Pvt. Ltd., where the requirement of an appropriate assessment or reassessment could not be bypassed through document-amendment or correction proceedings.
On limitation, the Tribunal found no merit in the assessees’ submissions based on the representation and subsequent clarification. It distinguished Tamil Nadu Petro Products Ltd. and In-House Productions Ltd., observing that those decisions did not deal with the requirement identified in ITC for modification of the assessment before refund could be sought. The Bench also reproduced the discussion in M.G.M. International Exports Ltd. on statutory refunds, finality of orders and the distinction between unconstitutional and illegal levies. A refund claim based on misconstruction of an Act, rule or notification remains subject to the statutory framework; a later understanding of the exemption does not itself reopen concluded assessments or replace the prescribed refund procedure.
On unjust enrichment, the Tribunal relied on Grasim Industries Ltd., Addison & Co. Ltd. and Allied Photographics India (P.) Ltd. to reject the proposition that subsequent credit notes automatically establish that the claimant bore the tax. The inquiry extends beyond repayment or adjustment between the supplier and its immediate customer to whether the incidence was passed further down the chain. In the appellate findings reproduced by the Tribunal, the educational institutions received catering services for students and faculty, who were the actual consumers. Information about fee receipts and pricing had not been furnished because the institutions declined disclosure on confidentiality grounds. The assessees had therefore failed to establish that the service tax burden had not ultimately been borne by those consumers.
The Tribunal also rejected the argument that Rule 6 of the Service Tax Rules, 1994 displaced the unjust-enrichment requirement applicable through Section 11B. It relied on the Bombay High Court’s decision in Prachar Communication Ltd., which examined the same contention in the service tax context and applied Addison. Credit notes to an immediate recipient do not, without the necessary evidence about onward incidence, establish entitlement to payment of the refund to the claimant. The Bench also referred to Vilsons Roofing Product Pvt. Ltd. as expressing a similar view. Hasmat Ali v. Amina Bibi and Uday Mohanlal Acharya, cited by the assessees, were held inapplicable because they concerned civil appellate powers and criminal proceedings respectively.
Consequently, the Tribunal found no merit in Service Tax Appeal Nos.87176, 87178, 87182, 87187 and 87199 of 2018 filed by the assessees and dismissed them. It found merit in Service Tax Appeal Nos.87923, 87925, 87928, 87929 and 87931 of 2018 filed by the Revenue and allowed them. The operative order does not direct a fresh verification exercise or grant a remand. The result is therefore an adverse disposal of the assessee appeals and a successful disposal of the Revenue appeals, supported by the Tribunal’s findings on unchanged self-assessments and the statutory requirements governing refund and unjust enrichment.
Recemnt Discussed Cases
- R C Gupta — (2025) 35 Centax 185 (CESTAT Delhi). Applied the requirement to challenge the assessment before seeking service tax refund.
- Commissioner of Customs (Port) v. Krish Fabrics India Pvt. Ltd. — Final Order Nos.76380–76384/2025, Customs Appeal No.75899 of 2022, dated 23 May 2025 (CESTAT Kolkata). Relied upon for the need for an appropriate assessment or reassessment before exemption-based refund.
- Jagdamba Phosphate v. Commissioner of CGST, Udaipur — (2024) 25 Centax 421, Final Order No.59378/2024, dated 28 October 2024 (CESTAT Delhi). Cited in the reproduced R C Gupta decision concerning unchallenged self-assessments.
- BT (India) Private Limited v. Union of India — (2023) 13 Centax 89; W.P.(C) 13968/2021, dated 6 November 2023 (Delhi High Court). Relied upon for finality of self-assessed service tax returns and the restricted scope of refund proceedings.
- Vilsons Roofing Product Pvt. Ltd. — Final Order Nos.85589–85613/2023, dated 25 April 2023 (CESTAT Mumbai). Cited as expressing a similar view on the refund issue.
- M.G.M. International Exports Ltd. v. Assistant Commissioner of Service Tax — 2022 (61) G.S.T.L. 565 (Madras High Court). Relied upon for statutory refund requirements and the finality of assessment orders.
- Hasmat Ali v. Amina Bibi and others — 2021 SCC OnLine SC 1142 (Supreme Court). Cited by the assessees; held inapplicable to the present refund dispute.
- ITC Ltd. v. Commissioner of Central Excise, Kolkata-IV — 2019 (368) ELT 216 (Supreme Court). Principal authority relied upon for modification of assessment or self-assessment before refund.
