Quick answer: On 8 October 2026 the Mumbai Regional Bench of the Customs, Excise and Service Tax Appellate Tribunal (S.K. Mohanty, Member (Judicial), and Sanjiv Srivastava, Member (Technical)) dismissed five appeals by Sodexo India Services Private Limited and allowed five connected appeals by the Revenue. The dispute concerned refund claims for service tax paid between July 2012 and September 2013 on housekeeping and canteen or outdoor catering services supplied to educational institutions. The Tribunal, applying Section 11B of the Central Excise Act, 1944 as extended to service tax by Section 83 of the Finance Act, 1994, held that (i) a refund claim is not maintainable while the assessee’s own self-assessment of service tax stands unmodified, (ii) neither a representation to the Central Board nor the Board’s clarificatory Circular No. 172/7/2013-ST dated 19 September 2013 revived limitation or amounted to an appeal, and (iii) credit notes issued to the recipients did not displace the bar of unjust enrichment.
Key Takeaways
- Self-assessment is an assessment. Following the three-Judge Bench decision of the Supreme Court in ITC Ltd., the Tribunal treats a self-assessed service tax return as an order of assessment that must be modified through the statutory appeal route before a refund can be claimed.
- A Board circular clarifies; it does not reopen. The Tribunal held that the circular “can clarify but not modify”, and that a representation to the Board is not an appeal under Section 85 of the Finance Act, 1994.
- Limitation runs from payment, not from discovery of exemption. Decisions that restarted the clock for tax paid under a mistaken belief were held to pre-date ITC Ltd. and to be of no assistance.
- Credit notes are not a safe harbour. The Tribunal treated Section 11B’s unjust enrichment bar as applicable to service tax refunds, rejecting the argument that Rule 6 of the Service Tax Rules, 1994 takes credit-note refunds outside it.
- Regime caution. This is a legacy service tax order. It does not construe Section 54 of the Central Goods and Services Tax Act, 2017.
1. Introduction
Every indirect tax assessee eventually pays tax that, on a later reading of an exemption, was never due. The question is what the law then lets that assessee do about it. The Mumbai Bench of the Tribunal answered that question restrictively in Sodexo India Services Private Limited v. Commissioner of CGST and Central Excise, Mumbai West (Final Order No. A/86223-86232/2026, decided 8 October 2026), and the answer reaches well beyond facility management companies.
From 1 July 2012, Notification No. 25/2012-ST dated 20 June 2012 exempted “auxiliary educational services” supplied to or by educational institutions. Sodexo, uncertain whether housekeeping and canteen services qualified, collected and paid service tax, returned ST-3 returns, and wrote to the Central Board of Excise and Customs. The Board’s Circular No. 172/7/2013-ST dated 19 September 2013 resolved the doubt in favour of exemption. Sodexo then sought refund of the tax it had paid, and issued credit notes to the institutions for the tax it had collected from them.
The Tribunal rejected the claim on every limb that mattered. Its reasoning joins two lines of authority that assessees often treat separately: the rule that refund proceedings cannot reopen an assessment, and the rule that a refund is available only to the person who has actually borne the tax. The route to a refund, the order shows, begins when the return is filed.
This article sets out the facts, analyses each issue decided, and considers what the order means for refund strategy, including under GST, to which the order does not speak.
2. Case Summary and Background
The assessees and the services. Sodexo India Services Private Limited held a service tax registration covering a range of taxable services, including business support, cleaning, management or business consultant services, manpower supply and outdoor catering service. Its customers were multinational companies, educational institutions and other organisations. The Revenue’s appeals were filed against two group entities, Sodexo Food Solutions India Pvt. Ltd. and Sodexo Facilities Management Services India Pvt. Ltd., and all ten appeals were heard together because the issues were identical (paragraph 2.7).
The exemption and the circular. Entry 9 of Notification No. 25/2012-ST dated 20 June 2012, effective from 1 July 2012, exempted services provided to or by an educational institution in respect of education, by way of auxiliary educational services. Sodexo supplied housekeeping and canteen or outdoor catering services to schools. It continued to collect and pay service tax from 1 July 2012. By representation dated 12 March 2013 it asked the Board for clarification. By Circular No. 172/7/2013-ST dated 19 September 2013, the Board clarified that these activities fell within auxiliary educational services and were exempt (paragraph 2.3).
The refund claims. Sodexo filed refund claims under Section 11B of the Central Excise Act, 1944, as applied to service tax by Section 83 of the Finance Act, 1994, on the ground that no tax was payable. The claims, filed between 15 January 2014 and 15 April 2014, covered the months from July 2012 to September 2013. Five Orders-in-Original dated 30 September 2014 rejected them (paragraph 2.4). Sodexo appealed to the Commissioner (Appeals).
The first appellate order. By Order-in-Appeal dated 5 March 2018 the Commissioner (Appeals) held both activities to be auxiliary educational services. He held the claims within time, counting one year from the Board’s clarification of 19 September 2013 and relying on In-House Productions Ltd. of the Bombay High Court and Hindustan Cocoa Products. He then split the claims on unjust enrichment. For housekeeping, because credit notes had been issued to the institutions, Sodexo had borne the incidence of tax, and refunds of Rs. 1,20,95,023 were sanctioned. For canteen and outdoor catering, the real recipients were students and faculty, Sodexo had not proved that the incidence was not passed on, and refunds of Rs. 4,70,89,131 were sanctioned but ordered to be credited to the Consumer Welfare Fund under Section 11B.
The cross-appeals. Sodexo challenged the unjust enrichment finding on canteen services. The Revenue challenged the limitation finding (it said Rs. 53,66,697 of the housekeeping refund, relating to July to December 2012, was time-barred) and the unjust enrichment finding on housekeeping (paragraphs 3.2 and 3.3).
The Tribunal’s decision. The appeals were heard on 18 August 2026 and decided on 8 October 2026. The Tribunal does not frame issues separately; its reasoning proceeds through the arguments. It held:
- The limitation argument had no merit, and the refund claims were not maintainable, because Sodexo had never challenged its self-assessments, and the representation to the Board and the Board’s circular could not substitute for that challenge (paragraphs 4.4 to 4.10).
- Credit notes did not defeat the bar of unjust enrichment, and Rule 6 of the Service Tax Rules, 1994 did not displace Section 11B in this respect (paragraphs 4.11 to 4.15).
The assessee’s appeals were dismissed and the Revenue’s appeals allowed (paragraphs 5.1 and 5.2). The order does not itemise the consequential relief, and this article does not speculate on it.
3. Legal Analysis
3.1 Why the exemption question was never decided
The Tribunal did not need to decide whether housekeeping and catering are “auxiliary educational services”. The Commissioner (Appeals) had held that they are, and the Tribunal’s dismissal of the assessee’s appeals proceeds on other grounds. This order is therefore not authority that either activity is, or is not, exempt under Entry 9 of Notification No. 25/2012-ST.
3.2 Self-assessment and the maintainability of refund
The pivotal passage is paragraph 4.4. Sodexo argued that, because it had represented to the Board, the tax should be treated as paid under protest. The Tribunal conceded that this “appears to be attractive and meritorious” at first instance, but found that it “lacks to stand”. Sodexo had collected and paid tax from 1 July 2012, filed ST-3 returns, and made no representation until 12 March 2013. The Board’s circular, the Tribunal said, “can clarify but not modify”. It operated on the representation, not on Sodexo’s own assessment.
The legal foundation is the Supreme Court’s decision, by three Judges, in ITC Ltd. (2019 (368) ELT 216 (SC)), which the Tribunal quotes at length (paragraphs 4.5 and 4.6). Three propositions from that decision carry the order. First, a self-assessment is an assessment, so that the deletion of the words “in pursuance of an order of assessment” from Section 27 of the Customs Act, 1962 made no difference. Second, refund proceedings are in the nature of execution; the officer cannot reassess or adjudicate on the conditions of an exemption notification. Third, the correct course for an aggrieved assessee is an appeal against the self-assessment, which, as ITC Ltd. held in respect of Section 128 of the Customs Act, lies against “any decision or order”. The Tribunal cites Flock (India) and Priya Blue Industries as the earlier foundation, both quoted within ITC Ltd. and in the Larger Bench decision in Eurotex Industries.
The step the Tribunal had to take was from customs and central excise to service tax. It acknowledged the gap candidly. ITC Ltd. was a customs case, although the Supreme Court drew on excise authority, and the Supreme Court had declined to follow the Rajasthan High Court in Mewar Palace, a service tax decision (paragraph 4.6). The bridge came from the Delhi High Court in BT (India) Pvt. Ltd. ((2023) 13 Centax 89 (Del.)), which the Tribunal quotes. That Court observed that the Customs and Excise Acts follow an identical self-assessment procedure, found Section 27(2) of the Customs Act pari materia with Section 11B(2) of the Central Excise Act, and relied on the definition of “assessment” in Rule 2(b) of the Service Tax Rules, 1994, which includes self-assessment, to hold that the same principles govern service tax. The Delhi Bench of the Tribunal in R C Gupta ((2025) 35 Centax 185 (Tri.-Del)) followed BT (India), and the Tribunal here treated the position as settled for the service tax regime.
On limitation, the Tribunal took the position that Sodexo’s representation to the Board “is not akin to appellate proceedings as provided by Section 85 of the Finance Act, 1994”, and that the Board “is not even the prescribed appellate authority” (paragraph 4.8). The point is straightforward but easy to miss. An assessee who writes to the Board, however diligently, has taken no step the statute recognises. Only an appeal to the Commissioner (Appeals) under Section 85 would have challenged the self-assessment.
The Tribunal added Krish Fabrics India Pvt. Ltd. (Kolkata Bench, Final Order dated 23 May 2025): an exemption can be claimed at any time, but only on an assessment or reassessment order to that effect.
3.3 The earlier limitation decisions distinguished
Sodexo relied on Tamil Nadu Petro Products Ltd. ([2008 (226) E.L.T. 51 (Mad.)]) and In-House Productions Ltd. ([2017 (3) G.S.T.L. 97 (Bom.)]), and the Commissioner (Appeals) had followed the latter. The Tribunal’s answer in paragraph 4.9 is short. Both pre-date ITC Ltd., both concerned limitation where duty had been paid under a mistaken belief of law, and “in terms of the decision of the Hon’ble Apex Court refund claims were not even maintainable”.
This is the order’s most consequential step, and it is also its most contestable. In-House Productions is a Bombay High Court decision. The Tribunal does not say that In-House Productions was overruled by ITC Ltd.; it says it was decided earlier and on a different footing. That is a respectable distinction if the two cases are truly about different problems (when time runs, as against whether a refund lies at all). But it leaves open a real question whether a High Court decision on when limitation starts for tax paid on a mistaken understanding of an exemption survives ITC Ltd. where an assessee did challenge the assessment. The Tribunal’s distinction is sound for an assessee who never challenged; it is not authority that such a decision is bad law.
The Tribunal also cited, in paragraph 4.10, the Madras High Court’s M.G.M. International Exports Ltd. ([2022 (61) G.S.T.L. 565 (Mad.)]), reproducing its discussion of Mafatlal Industries and the guidelines in Anam Electrical. The theme is that refund must proceed under and in accordance with Section 11B and the time limits it prescribes, and that an assessee must “succeed or fail in his own proceedings”. The Tribunal used this material as reinforcement of the finality principle rather than as an independent ground.
3.4 Unjust enrichment and the credit-note argument
The Tribunal’s treatment of unjust enrichment (paragraphs 4.11 to 4.15) consists largely of extracts from authority. It quotes the Supreme Court in Grasim Industries Ltd. (2011 (271) E.L.T. 164 (S.C.)), which discounted a credit note issued after two years because Section 12 of the Central Excise Act expects the documents on which duty is assessed to be filed at the time of clearance. It then reproduces Addison & Co. Ltd. (2016 (339) E.L.T. 177 (S.C.)), including the passage that the sine qua non of a Section 11B claim is that the claimant establishes that “the incidence of such duty has not been passed on by him to any other person”, and Allied Photographics India (P) Ltd. (2004 (166) E.L.T. 3 (S.C.)).
Sodexo’s answer was that Rule 6 of the Service Tax Rules, 1994 itself ensures that unjust enrichment does not apply once a credit note has been issued, relying on Instruction No. 341/34/2010-TRU dated 31 March 2011 (paragraph 3.2). The Tribunal said that the Bombay High Court had already answered this argument in Prachar Communication Ltd. ([2017 (7) GSTL 6 (Bom.)]), and reproduced that decision’s framing of the questions, whether Rule 6 prevails over Section 11B and whether post-clearance credit notes help an assessee over the unjust enrichment bar (paragraph 4.14). The Tribunal also noted a coordinate bench’s decision in Vilsons Roofing Product Pvt. Ltd. (paragraph 4.15).
Two observations follow. First, the Tribunal’s conclusion is compressed. Paragraph 4.17 states that the assessee’s appeals lack merit and that the Revenue’s have merit, without applying the extracted authorities to Sodexo’s own credit notes, contracts or evidence. The Commissioner (Appeals) had made two separate findings, one for housekeeping (credit notes show the assessee bore the tax) and one for canteen services (the burden fell on students and faculty). The Tribunal’s allowing of the Revenue’s appeals necessarily rejects the first of these, yet the reasons for doing so are not separately stated. A reader should treat the unjust enrichment holding as resting on the extracted authority, with the factual application left implicit.
Second, the authorities are largely excise decisions. Prachar Communication is the service tax authority, a High Court decision that binds the Tribunal, and reliance on it is the safest part of the analysis.
3.5 Authorities that did not assist
The Tribunal dismissed the assessee’s reliance on Hasmat Ali v. Amina Bibi ([2021 SCC OnLine SC 1142]) as a decision on the Code of Civil Procedure and the powers of a High Court in appeal, and on Uday Mohanlal Acharya ([2000 SCC OnLine Bom 585]) as a criminal case (paragraph 4.16).
3.6 Provisions, period and amendment
The order concerns service tax paid for July 2012 to September 2013, under Chapter V of the Finance Act, 1994, in force before 1 July 2017. The refund provision is Section 11B of the Central Excise Act, 1944, as applied by Section 83 of the Finance Act, 1994. The reasoning does not depend on any amendment in that period, since it rests on the structure of self-assessment and appeal.
The reasoning does not carry over automatically to the CGST Act, 2017. Section 54 of that Act contains its own refund machinery, and whether a GST registered person’s self-assessed return is an “assessment” that must be appealed before a refund can be claimed is not addressed in this order. The Tribunal’s reasoning is, at most, persuasive for GST refund claims.
3.7 Critique
The core holding is correct on its own terms. If the law is that a self-assessment stands until modified, then a Board circular cannot dislodge it, and a letter to the Board is no appeal. The Tribunal is also right that the Supreme Court’s later decision in ITC Ltd. took the earlier “mistake of law” limitation cases out of the equation where no assessment was challenged.
What leaves a reader uneasy is the allocation of burdens that results. Sodexo paid, in the Commissioner (Appeals)’s words, “as a matter of abundant caution”. The order tells such assessees that caution is not enough: tax paid on a doubtful exemption is practically irrecoverable unless the self-assessment is appealed. That is harsh, but it follows from the statutory design that ITC Ltd. confirmed.
4. Practical Significance
Appeal the self-assessment where the exemption is doubtful. The Tribunal’s reasoning makes the Section 85 appeal against the self-assessment the gateway to refund. An assessee who pays tax on a service whose exemption status is uncertain should consider filing an appeal within time, rather than depending on a later clarification. A representation to the Board is useful for obtaining clarity, but it does not preserve a refund right.
Treat a clarificatory circular as information, not as a limitation trigger. Many assessees treat the date of a favourable Board circular as the date from which a refund clock runs. This order rejects that view for service tax refunds. Practitioners advising on legacy claims should examine whether the self-assessment was ever challenged, and if not, assume the claim is exposed.
Do not assume credit notes will secure a refund. Credit notes issued to recipients after the event do not by themselves establish that the claimant bore the tax. The Tribunal’s authorities, Grasim and Addison, point to documentary evidence from the time of supply, and to proof that the incidence was not passed on down the chain, including to ultimate consumers. Where the service is consumed by students and staff of an institution, as with canteen services here, the Commissioner (Appeals) saw the real burden as falling on them. The claimant’s burden may be hard to meet when the recipient institution declines to supply fee and pricing information, as occurred here.
Contract and invoicing practice. Suppliers who invoice service tax on services whose exempt status is uncertain should consider contract terms that deal with who bears the tax if an exemption is later confirmed, and how refunds will be shared. Without such terms, a supplier who credits the recipient may find its own refund claim refused for unjust enrichment.
Choice of remedy. The statutory route here ran through Section 11B and the Section 85 appeal. The Tribunal’s extracts from Mafatlal Industries reserve a separate category of refunds of tax levied under an unconstitutional provision, but a dispute about the reach of an exemption notification, as here, falls in the ordinary category.
For GST. The corresponding questions under Section 54 of the CGST Act, 2017 remain open as a matter of this order’s own reasoning. Taxpayers who have paid GST on supplies later held exempt should obtain advice on the available rectification and appeal routes rather than assume that an application under Section 54 will succeed without them.
5. Conclusion
Sodexo India Services is a disciplined application of settled authority to a legacy service tax problem. It confirms, for the service tax regime, that a self-assessment is an assessment, that refund proceedings are not a means of reopening it, that a Board circular cannot restart the limitation period, and that unjust enrichment under Section 11B applies to service tax refunds in the same way as to excise duty refunds.
Its limits matter as much as its holding. It does not decide whether housekeeping or catering services are exempt auxiliary educational services. It does not decide what happens where an assessee did challenge its self-assessment. Its treatment of unjust enrichment relies on extracted authority and does not examine Sodexo’s own credit notes. And it does not consider the CGST Act, 2017.
For practitioners, the lesson is practical and early: the refund fight is won or lost at the point of payment. An assessee who pays under doubt and does nothing further may find that doubt, later vindicated by the Board, buys no refund at all. For the Revenue, the order is a reminder that the unjust enrichment bar rests on evidence, and that consequential relief should reflect the Tribunal’s reasoning with care. Whether the Tribunal’s strict approach will be tested in a higher forum, and whether it will be extended to GST refunds, is yet to be seen.
Citations
Authorities applied or relied on by the Tribunal
- Sodexo India Services Private Limited v. Commissioner of CGST and Central Excise, Mumbai West, Final Order No. A/86223-86232/2026, CESTAT Mumbai, 8 October 2026: https://indiankanoon.org/doc/67126580/
- ITC Ltd., 2019 (368) E.L.T. 216 (S.C.) (three-Judge Bench)
- Collector of Central Excise, Kanpur v. Flock (India) Pvt. Ltd., 2000 (120) E.L.T. 285 (S.C.), and Priya Blue Industries Ltd. v. Commissioner of Customs (Preventive), 2004 (172) E.L.T. 145 (S.C.), as quoted in ITC Ltd.
- Eurotex Industries and Exports Ltd., 2007 (216) E.L.T. 137 (T-LB)
- BT (India) Pvt. Ltd., (2023) 13 Centax 89 (Del.)
- R C Gupta, (2025) 35 Centax 185 (Tri.-Del); Jagdamba Phosphate v. Commissioner of CGST, Udaipur, (2024) 25 Centax 421 (Tri.-Del), as quoted within it
- Krish Fabrics India Pvt. Ltd., CESTAT Kolkata, Final Order Nos. 76380-76384/2025 dated 23 May 2025
- M.G.M. International Exports Ltd., 2022 (61) G.S.T.L. 565 (Mad.), quoting Mafatlal Industries Ltd. v. Union of India, 1997 (89) E.L.T. 247 (S.C.), and Assistant Collector of Customs v. Anam Electrical Manufacturing Co., 1997 (90) E.L.T. 260 (S.C.)
- Grasim Industries Ltd., 2011 (271) E.L.T. 164 (S.C.)
- Commissioner of Central Excise, Madras v. Addison & Co. Ltd., 2016 (339) E.L.T. 177 (S.C.)
- Commissioner v. Allied Photographics India (P) Ltd., 2004 (166) E.L.T. 3 (S.C.)
- Prachar Communication Ltd., 2017 (7) GSTL 6 (Bom.)
- Vilsons Roofing Product Pvt. Ltd., Final Order Nos. 85589-85613/2023 dated 25 April 2023 (CESTAT)
Authorities cited by counsel and not accepted
- Tamil Nadu Petro Products Ltd., 2008 (226) E.L.T. 51 (Mad.)
- In-House Productions Ltd., 2017 (3) G.S.T.L. 97 (Bom.), on which the Commissioner (Appeals) also relied
- Hasmat Ali v. Amina Bibi, 2021 SCC OnLine SC 1142
- Uday Mohanlal Acharya, 2000 SCC OnLine Bom 585
- Instruction No. 341/34/2010-TRU dated 31 March 2011
Legislation and notifications
- Section 11B of the Central Excise Act, 1944, as applied by Section 83 of the Finance Act, 1994 ; Section 85 of the Finance Act, 1994 (appeals): https://www.indiacode.nic.in/
- Rule 2(b) and Rule 6 of the Service Tax Rules, 1994
- Notification No. 25/2012-ST dated 20 June 2012, Entry 9
- Circular No. 172/7/2013-ST dated 19 September 2013
- Section 54 of the Central Goods and Services Tax Act, 2017: https://www.indiacode.nic.in/
This article is not legal advice and does not create an attorney–client relationship. Readers should verify the certified copy of the judgment and any subsequent clarificatory orders before relying on it, and consult a qualified advocate on the facts of their matter.