Firm Matters

Khaitan & Co advised Hardy Exploration & Production (India) Inc., an operator under a production sharing contract with ONGC, Tata Petrodyne Ltd, Hindustan Oil Exploration Company Ltd and the Government of India, in successfully defending a service tax refund claim before the Madras High Court.

The dispute arose from the Client's agreement with Aban Offshore Ltd. for the supply and operation of a floating rig for its petroleum extraction activities. The Client had claimed a refund of service tax paid under "mining service" from 1 June 2007, on the basis that the supply of rigs became taxable only from 16 May 2008, under the newly introduced "supply of tangible goods service" — meaning tax paid prior to that date had been wrongly charged. The CESTAT had ruled in the Client's favour, finding that the Client had established the absence of unjust enrichment and that the limitation period under Section 11B of the Central Excise Act did not apply to a refund claim arising from a "mistake of law."

The Commissioner of Service Tax, Chennai, appealed this order before the Madras High Court. By order dated 10 August 2026, the Madras High Court dismissed the appeal, upholding the Client's refund claim.

The Firm handled the appeal strategy, pleadings, court appearances and final arguments, securing dismissal of the Department’s appeal and preserving the Client’s successful refund of service tax of INR 13,88,47,930/-.