Skilltech Engineers And Contractors Pvt Ltd vs Commissioner Of Central Tax, Mysuru Commissionerate

ST/20619/2018



CUSTOMS, EXCISE & SERVICE TAX APPELLATE
TRIBUNAL
BANGALORE

REGIONAL BENCH - COURT NO. 1
Service Tax Appeal No. 20619 of 2018

(Arising out of Order-in-Appeal No. MYS-EXCUS-APP-208-17-18
dated 02.02.2018 passed by the Commissioner of Central Tax
(Appeals), Mysuru.)

Skilltech Engineers and
Contractors Pvt. Ltd.
nd
No. 2904 (Ch-67), 2 Floor,
Sarawathi Puram,
Mysore Karnataka – 570 009.
Appellant(s)

VERSUS
Commissioner of Central
Excise and Service Tax,
S1 & S2, Vinaya Marga,
Siddartha Nagar,
Mysore – 570 011.
Respondent(s)

APPEARANCE:
Mr. S.K. Venugopala Rao, Chartered Accountant (CA) for the Appellant
Mr. Vinod Kumar Garhwal, Superintendent (AR) for the Respondent

CORAM:
HON'BLE MR P.A. AUGUSTIAN, MEMBER (JUDICIAL)
HON'BLE MRS R. BHAGYA DEVI, MEMBER (TECHNICAL)

Final Order No. 21237 /2026

DATE OF HEARING: 27.05.2026
DATE OF DECISION: 23.10.2026

PER : P.A. AUGUSTIAN


The issue in the present appeal is regarding refund of
wrongly paid service tax.

2. Appellant is providing service of ‘Erection, Commissioning,
Installation Services’ on distribution of electricity power to
various Governments undertaking. The appellant filed a refund
claim for Rs.20,80,816/- paid towards the above services
rendered to Government authorities claiming exemption under
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Notification No. 25/2012-ST [Sl.No. 12(a)] dated 20.06.2012.
However, the same was rejected by the original authority on the
ground that earlier the Commissioner (Appeals) in the case of
M/s. Manjunatheshwara Electricals had denied the benefit of the
above notification. The original authority also rejected the refund
claim on the ground that the appellant had charged and collected
service tax from the service recipients hence the appellant was
not eligible for the refund claim on account of unjust enrichment
under Section 11B of the Central Excise Act, 1944 read with
Section 83 of the Finance Act, 1994. On appeal the
Commissioner (Appeals) in the impugned order held in favour of
the appellant to the extent that they were eligible for the benefit
of the notification. However, upheld the reasoning of the original
authority on unjust enrichment and hence rejected the refund
claim. Aggrieved by this order the appellant is in appeal before
us.

3. When the appeal came up for hearing, Learned Consultant
for the Appellant submits that the Hon'ble Commissioner (A)
grossly erred in rejecting the Appeal stating that it is hit by
limitation just by making a comment that the OIO has not
specified in that the period for which the service tax was paid
and further he presumed that there is a case for unjust
enrichment based on the comments of the adjudicating Authority
that the Appellant has already collected the service tax from the
customers without verifying whether there was any unjust
enrichment actually or not. In this regard, Learned Consultant
submits that the refund claim of Rs. 20,80,816/- is related to the
period April 2014 to Aug 2014 and the Appellants have filed the
refund application on 23.06.2016 which is well within the
prescribed time. As regarding the allegation that the appellant
collected service tax, though as per the condition of contract,
price is inclusive of all taxes as applicable, it cannot be said that
by mistaken position of law if somebody makes the payment it
can be construed that the said levy of tax is collected from the
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customer. The Customer has agreed for the total price in this
case for complete execution of the contract as inclusive of all
taxes as applicable as per law and in such a situation it cannot
presumed that the provider of the service has collected the
service tax from the customer wherein the agreed price was
inclusive of all actual taxes payable as per law. He further
submits that it is up to the lower Authorities to verify whether
there is an unjust enrichment or limitation of time and the
Commissioner (A) cannot sit on the judgment of point which was
not at all there in the Original Appeal. Accordingly, the OIA is
bad in law and cannot withstand scrutiny of law.

4. Learned Consultant further submits that initially when the
proceedings were pending before the Commissioner (Appeals)
Mysore, Appellants as an abundant caution have paid the
disputed tax and interest amounting to Rs.20,85,815/- through a
separate challan. Under these circumstances it is not a case of
Unjust enrichment and the appellants have not collected these
taxes separately in invoices raised on their customer
M/s.Chamundeshwari Electricity Supply Corporation (CHESCOM).
In this regard, Learned Consultant drew our attention to some of
the invoices issued by appellant and submits that there is no
evidence regarding charging of service tax on the taxable
service, since such services are exempted from payment of
service tax. Thus, Original Authority wrongly concluded that
Appellants have collected the taxes over and above the contract
price and have rejected refund in terms of Section 11B of the
Central Excise Act stating that there is an element of unjust
enrichment. Learned Consultant also draws our attention to the
contract awarded by M/s. CESCOM and the copies of the bill
issued by M/s. CESCOM and submits that as evident from the
above document, Appellant has not collected service tax as held
by fist Appellate authority. Further there is no such allegation in
the show cause notice also. Considering the same, the impugned
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order is unsustainable and Appellant is eligible for refund of the
due amount as claimed by them.

5. The Learned Authorized Representative (AR) reiterated the
findings in the impugned order and submits that once the refund
claim is submitted, such refund claim has to undergo the
scrutiny of Section 11B of Excise Act and considering the above,
the Adjudication authority rightly rejected the claim.

6. Heard both sides. The appellant’s claim that unjust
enrichment was not part of the show-cause notice hence refund
cannot be rejected on that ground by the authorities concerned
is mis-placed since it is a settled issue as is held by the Hon’ble
Supreme Court that all refund claims have to be necessarily
processed to examine the element of unjust enrichment.
Therefore, the only issue before us is whether the authorities
were correct in rejecting the refund claim on the ground of
unjust enrichment.
7. We find that the original authority with regard to unjust
enrichment held as follows:
16. Further, on perusal of the invoices raised by the assessee, I
observe that they have charged and collected service tax from
the service recipients M/s CHESCOM as well as M/s KPTCL. As
they have already collected the service tax amounts from their
clients, the question of allowing the refund of correctly paid
service tax does not arise. Even otherwise for the sake of
argument, assuming but not accepting that the refund has to be
given, the same would be hit by the concept of bar of unjust
enrichment.

8. This was upheld by the Commissioner (Appeals) observing
as follows:
The third requirement under section 11B of the act is that the
incidence of service tax / duty must not have been passed to any
person. As per the para 16 of the impugned OIO the adjudicating
authority has mentioned that the appellant has already collected
the service tax amounts from their clients based on the
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verification of the invoices raised by the appellant. On this
verification the lower authority states that the claim would be hit
by bar of unjust enrichment. The appellant has not brought any
facts / documents to prove contrary to this stand of the lower
authority and it is clear that the appellant has collected and
received the service tax amount from the client i.e. M/s KPTCL.
Hence the claim is hit by unjust enrichment and the amount paid
by the appellant has to be credited to consumer welfare fund as
per provisions of section 11B of the CEA.

9. As per the evidence on record, when demand was made
for the previous period, as an abundant precaution and to avoid
interest and penalty, appellant had paid the amount and once
the first Appellate authority held that the Appellant is not liable
to pay service tax as per the exemption notification, no
presumption can be drawn that the Appellant had collected the
service tax while collecting the gross amount from the service
recipient. The appellant has placed before us ‘Detailed Work
Award’ issued to them by their clients and the other documents
named ‘Regularisation of unauthorised IP sets’ to claim that tax
has not been collected from their clients. From these records
there is no evidence regarding service tax being collected by the
Appellant. Since, these documents were not placed before the
original authority and since we are unable to identify that these
relate to the same transactions for which refund is claimed, the
question of unjust enrichment needs further verification.
Therefore, to verify the facts, the appellant is directed to
produce all necessary documents along with CA certificate
regarding unjust enrichment for the relevant period and on
submission of these documents the original authority to pass
appropriate orders on the question of unjust enrichment.


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10. Accordingly impugned order is set aside and appeal is
allowed by way of remand to the original authority to verify the
issue regarding unjust enrichment only in accordance with law.

(Order pronounced in Open Court on 23.10.2026)



(P.A. AUGUSTIAN)
MEMBER (JUDICIAL)



(R. BHAGYA DEVI)
MEMBER (TECHNICAL)
Raja…
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