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Case Law Details

Case Name : Commissioner of Service Tax, Delhi Vs. AP. Engineers [2014 (10) TMI 563 - CESTAT NEW DELHI]
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Refund is not hit by doctrine of unjust enrichment where contract value is inclusive of Service tax and same has not been charged separately by the service provider

In the instant case, AP. Engineers (the Assessee) filed a refund claim of Service tax which was rejected by the Adjudicating Authority as hit by doctrine of unjust enrichment. On appeal being made to the Commissioner (Appeals), the Commissioner (Appeals) granted the refund claim after observing that:

  • As per terms of the contract, the taxable value was inclusive of all taxes and therefore the Assessee had to bear all the taxes including Service tax and they had borne the Service Tax liability without charging the same from the clients;
  • The Adjudicating Authority has jumped to the conclusion without verifying the accounts and record of the Assessee that the Assessee had charged and received the amount of Service tax from their clients and rejected the refund claim as hit by doctrine of unjust enrichment.

Thereafter, against the order of the Commissioner (Appeals), the Revenue preferred an appeal before the Hon’ble CESTAT, New Delhi.

It was held by the Hon’ble CESTAT, New Delhi that when the contract with the client was inclusive of all the taxes, the tax variation, being not a part of the contracted value, would not result in any unjust enrichment of the Assessee. Hence, the appeal filed by the Revenue was dismissed.

(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email:

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May 2024