TMI Blog2023 (9) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in the present dispute is 2009, which is prior to insertion of the Explanation to Rule 3(4)(e) w.e.f., 1.7.2012. Hence we, hold that such restriction of utilization of Cenvat credit was not applicable for the period under dispute - the utilization of Cevat Credit for payment of service tax on 'import of service' by the Appellant is legally tenable. Denial of inter-adjustment of amount paid within various heads against the liability - HELD THAT:- The Appellant has paid the total tax payable during the disputed period correctly. If the adjustment is allowed between the excess service tax paid and the short paid Education Cess/SHE Cess and vice versa, then there was short payment of Rs. 895,160/- only in the month of January 2008, which has already been paid by them on 5th May 2008. Thus, the contention of the Appellant is that if the adjustment is permitted then there won't be any short payment overall. Accordingly, they contended that the demand confirmed in the impugned order is not sustainable. Thus, the issue to be decided in this case is whether excess /short paid amount under the service tax head can be adjusted for payment of excess/short paid amount in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility in relation to Import of Service, on the ground that these services do not qualify as output services. The Period involved on this issue is March 2009 and the amount confirmed in the impugned order on this count, is Rs. 41,07,195/-. (ii) Denial of inter-adjustment of amount paid within various heads against the liability. The Period involved on this issue is Financial Year 2007-08 and the amount confirmed in the impugned order on this count is Rs.17,45,706. 3. The Appellant stated that as per Rule 3(4)(e) of the Cenvat Credit Rules, 2004, CENVAT credit may be utilized for payment of service tax on any output service. As per Rule 5 of Taxation of Services (Provided from Outside India and received in India) Rules, 2006, taxable services provided from outside India and received in India shall not be treated as output services for the purpose of availing credit of duty of excise paid on any input or service tax paid on any input services under CENVAT Credit Rules, 2004. The Appellant stated that there is no bar under Rule 3(4) of the CENVAT Credit Rules, 2004 towards utilizing the CENVAT credit for payment of service tax by them, as a deemed output service provider. Moreov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Service Tax, Bangalore Versus Arvind Fashions Ltd [2009 (13) S.T.R. 544 (Tri. - Bang.), the Tribunal, Bangalore has held as under: Intellectual Property service received from abroad deemed as output service when person receiving service liable to pay Service tax and accordingly the service tax on deemed output service can be paid by utilizing CENVA credit on input services in view of deeming fiction 4.5 In the case of Commissioner of Service Tax, Bangalore Versus Aravind Fashions Ltd [2012 (25) S.T.R. 583 (Kar.), The Hon ble High Court has held as under: In the instant case, though he is the recipient of service tax, the service provider is outside the country. In law, he is treated as a service provider and is levied tax. In other words, the liability to pay tax on the service which he has received is foisted on him under law. It is to discharge the liability he is entitled to use the CENVAT credit which was available with him and therefore the Tribunal was justified in interfering with the order passed by the Commissioner. In that view of the matter, we do not see any merit in these appeals. As there is no liability to pay tax the question of imposin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty, merely mentioning wrong code in the process, cannot result into such harsh consequence of the entire payment not being recognized as valid, incurring further liability of repayment of the basic duty with interest and penalties. Such amount was deposited by the petitioner with the Government of India and it was duly credited in the Government account. 5.3 In the case of Commissioner of Central Excise, Haldia Versus M/S Tata Metaliks Ltd. (Vice-Versa) [2023 (6) TMI 10 - CESTAT Kolkata, it has been held as under : We find that the Appellant has discharged their Service Tax liability under RCM on GTA services. They have deposited the service tax in the account of Kolkata Commissionerate (AABCT1389BST002) instead of Haldia Commissionerate (AABCT1389BST001). The mistake in remittance of service tax in a difference service tax registration of the same assessee is a matter of internal adjustment at department s end and the assessee cannot be saddled with the demand of service tax again. This clarification has been issued by Boardin Circular No 58/07/2003 dated 20/05/2003 and communicated to the trade vide Trade Notice No 03/2014dated 10/07/2014 by Cochin Commissionerate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst Education Cess and SHE Cess. Accordingly, they prayed for upholding the impugned order. 8. Heard both sides and perused the appeal records. 9. We observe that the impugned order covers two issues. The first issue is with respect to denial of utilization of the CENVAT credit for discharging service tax liability in relation to Import of Service. The department's contention is that Rule 3(4)(e) of Cenvat Credit Rules,2004 prohibits such utilization. In the impugned order it is alleged that these services do not qualify as output services and hence Cenvat credit cannot be utilized for payment of service tax liability on 'import services'. 10. We observe that the interpretation of Rule 3(4) of the Cenvat Credit Rules, 1994 by the Ld. Commissioner in the impugned order is legally not tenable. We find that an Explanation has been added to Rule 3(4)(e) of the Cenvat Credit Rules, 2004, w.e.f.01.07.2012, to the effect that Cenvat credit cannot be used for payment of service tax in respect of services where the person liable to pay tax is the service recipient . Thus, it is amply clear that there was no such restriction in the Cenvat Credit Rules, 2004, prior to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt only the amount of service tax and Education Cess/SHE Cess short paid and confirmed Rs.17,45,706 in the impugned order. The excess/short payment of service tax and Education Cess/SHE Cess on various months during the period in dispute is furnished below: Month Service Tax Edu. Cess SHE Total Service Tax Edu. Cess SHE Total Diff ere nce May 07 3,268,351 65,367 2,150 3,335,868 3,270,237 43,738 21,869 3,335,844 (24) June 3,053,910 61,078 18,622 3,133,611 3,068,062 43,754 21,877 3,133,693 82 July 5.458.567 109.171 22.849 5.590.587 5.473.841 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cess and vice versa, then there was short payment of Rs. 895,160/- only in the month of January 2008, which has already been paid by them on 5th May 2008. Thus, the contention of the Appellant is that if the adjustment is permitted then there won't be any short payment overall. Accordingly, they contended that the demand confirmed in the impugned order is not sustainable. Thus, we observe that the issue to be decided in this case is whether excess /short paid amount under the service tax head can be adjusted for payment of excess/short paid amount in Education Cess or not. 16. We observe that a similar issue under Central Excise came before the Hon'ble High Court of Guwahati in the case of Kamakhya Cosmetics Pharmaceuticals Pvt. Ltd reported in 2015(323)ELT33(Gau), wherein it has been held as under: 5. In the present case, the assessee utilized Cenvat credit of Basic Excise duty for paying Education Cess to which department raised objection. The Adjudicating authority held that Cenvat Credit of Basic Excise Duty could not be utilized for payment of Education Cess and accordingly deducted the amount from the refund due to the assesse. 6. The assessee preferred ..... X X X X Extracts X X X X X X X X Extracts X X X X
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