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2014 (6) TMI 625 - AT - Service TaxAdjustment of tax paid under protest with service tax liability - Whether the appellant could have adjusted the excess Service Tax demand of Rs. 4,17,73,025/- which has been paid under protest - Held that:- appellant sought clarification from the department and they were advised by the department that they are not liable to pay Service Tax on renting/leasing the premises in the Airport. The appellant adjusted the excess Service Tax paid by them against the tax liability during January - March, 2007. The action taken by them was strictly in accordance with the provisions of said Rule and, therefore, we find that the demand towards such adjustment of credit in the impugned order is not sustainable in law. The only fact that needs to be verified is whether the amount adjusted is the amount of excess tax paid or not. This needs to be verified by the department from the records and the evidence adduced by the appellant in this regard. If, on such verification, it is found that the appellant is not liable to pay any Service Tax, the question of imposition of any penalty also would not arise. As regards the demand towards excess Cenvat credit availed on the input service during the impugned period, this position has been clarified by the C.B.E. & C. in Circular No. 137/12/2008-CX.4, dated 21-11-2008, wherein the Board has clarified that utilization of accumulated credit on account of 20% cap under Rule 6(3)(c) of the Cenvat Credit Rules, 2004, is permissible from 1-4-2008. Therefore, the assessee is entitled to avail the accumulated credit on account of 20% cap w.e.f. 1-4-2008 or the subsequent period. In case any assessee has utilized the accumulated credit prior to 1-4-2008, they are liable to pay the interest on the excess credit availed and utilized during the period. In view of the above clarification by the Board, the demand of Rs. 1,41,15,163/- is not sustainable in law. What can be recovered from the assessee is only interest on the said amount of excess credit utilized prior to 1-4-2008. - Matter remanded back - Decided in favour of assessee.
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