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ST – Tax deposited against wrong assessee code – mistake came to notice of department in the year 2011, but SCN issued in 2014 – demand time barred: CESTAT

2019-TIOL-2093-CESTAT-DEL

IN THE CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST BLOCK NO 2, R K PURAM, PRINCIPAL BENCH, NEW DELHI-110066

BENCH-SM
COURT NO. IV

Service Tax Appeal No. ST/52772/2018-ST [SM]

Arising out of Order-in-Appeal No.607 (CRM) ST/JDR/2018, Dated: 20.06.2018
Passed by the Commissioner (Appeals), CGST, Jodhpur

Date of Hearing: 13.11.2018
Date of Decision: 13.11.2018

M/s RAJEEV AND ASSOCIATE

Vs

COMMISSIONER OF CENTRAL EXCISE
UDAIPUR

Appellant Rep by: Mr Vijay Kumar, Adv.
Respondent Rep by: Mr K Poddar, DR

CORAM: Rachna Gupta, Member (J)

ST – The assessee is engaged in providing business auxiliary services, errection, commissioning & installation services and maintenance and repair services – During audit, it was observed by Department that the assessee has shown the payment of Service Tax during the period 2010- 11 to a Code No. AAOFA 3157 ESP 001 the said Code is not allotted to the assessee – There is annexed the order of Commissioner (A) vide which the assessee was allowed the refund as was deposited by him, however, against a wrong Service Tax Code and in the name of a wrong depositor – The Commissioner (A) in the said order has clearly observed that the amount deposited in name of M/s. Rajeevated Engineering & Allied Products has been debited in the Bank account of assessee – Accordingly, the refund was allowed – No doubt the Service Tax as demanded by impugned SCN was to be deposited against the correct Service Tax Code of assessee – From impugned order, it is apparent that the amount which was allowed to be refunded has been refunded to the assessee, but it is the assessee’s contention that the amount was never refunded and it was understanding that the same shall be appropriated against his liability for the period in dispute – However, there is admittedly no evidence for the deposit of impugned demand in assessee’s Service Tax Code – But, the record bears the copy ot ST-3 Return as was filed by assessee for the disputed period – Perusal thereof makes it abundantly clear that the said return is about the impugned amount only and that it was filed on 14.04.2011 itself – Accordingly, irrespective the amount was not actually deposited against assessee ST Code, the fact remains is that the notice of impugned mistake was to the Department since April 2011 itself – The allegations of Department about suppression of facts on part of assessee with the mention that the mistake came to the notice only at the time of Audit is not sustainable specially in a case where the duty has been paid, however, to a wrong Excise Code – If the amount is deposited and duly credited in Govt. account, it cannot be treated as non-payment of duty – Above all, it cannot entitle the Department to invoke the extended period of limitation – The period in dispute is of the year 2011 – The SCN has been issued to the year 2014 – The impugned mistake was in the notice of Deptt. since the year 2011 – Resultantly, the SCN is barred by limitation – The order under challenge is not sustainable: CESTAT

Appeal allowed

Case laws cited:

Devang Paper Mills Pvt. Ltd. vs. Union of India – 2016-TIOL-37-HC-AHM-CX…Para 4

FINAL ORDER NO. 53308/2018

Per: Rachna Gupta:

The appeal in hand has been filed being aggrieved of order of Commissioner (Appeals) bearing No.607 dated 20th June, 2018. The appellant M/s. Rajeev & Associates have Service Tax Registration No. AAMFR2092MSD001 and they are engaged in providing business auxiliary services, errection, commissioning & installation services and maintenance and repair services. During the course of audit, it was observed by the Department that the appellant has shown the payment of Service Tax amounting to Rs.67,918/- during the period 2010- 11 to a Code No. AAOFA 3157 ESP 001 the said Code is not allotted to the appellant. Accordingly, vide show cause notice No.10637 dated 15.10.2014, it was alleged that the appellant has not discharged its liability of paying Service Tax to the extent of Rs.67,918/-. The said payment was proposed to be recovered alongwith the interest at the appropriate rate and the proportionate penalty and the said proposal has been initially confirmed by the Order-in-Original No.48 dated 18.06.2015, which has been upheld by the order under challenge.

2. I have heard Mr. Vijay Kumar, ld. Counsel for the appellant. It is submitted that the Service Tax for the period in dispute amounting to Rs.67,918/- was deposited by Challan No.00004 dated 30.03.2011 to the credit of Central Government. However, in the name of wrong depositor i.e Rajeevated Engineering & Allied Products against a wrong Service Tax Code number. It is submitted that it happened due to clerical/ typographical error. When the said mistake was brought to the notice of Department, the appellant was advised to file the refund claim. The said claim was initially rejected vide order No. 341/R/2011 dated 30th September, 2011. However, Commissioner (Appeals) vide Order No. 108 dated 30th August, 2013 allowed the refund of Service Tax. It is further submitted that the appellant requested to accept the said refunded amount as the payment of Service Tax in their name. Despite the said request, an audit objection was raised and the impugned show cause notice has wrongly been issued. The adjudicating authorities are alleged to have committed an error while ignoring that the refund has already been allowed in favour of the appellant and the deposit has already been held as a mere typographical error. Finally, it is submitted that even without looking into the merits, the order is liable to be set aside for the reason that show cause notice is barred by limitation. The factum of deposit of impugned demand for the disputed period but in a wrong account was in the notice of Department since the year 2011 itself hence they were not entitled to invoke the extended period of limitation. The order is accordingly prayed to be set aside. Appeal is prayed to be allowed.

3. Per-contra, ld. DR has, while justifying the impugned order has impressed upon para 5.2 thereof, and has prayed for appeal to be dismissed. it is submitted that irrespective the appellant was allowed the refund, it was still his responsibility to deposit the Service Tax in dispute. The same has not been deposited, the proposal has rightly been confirmed by the adjudicating authority below. It is also impressed upon that the asserted inadvertent mistake was never brought to the notice of the Department by the appellant on its own. It is only after an Audit was conducted that the matter was revealed, since it amounts to the suppression of the relevant facts. The extended period was rightly invoked. Appeal is accordingly prayed to be dismissed.

4. After hearing both the parties and perusing the entire record, I observe that there is annexed the order of Commissioner (Appeals) bearing No. 108 dated 30th August, 2018 vide which the appellant was allowed the refund of Rs.69,119/- as was deposited by him vide a Challan No. 00004 dated 30th March, 2011, however, against a wrong Service Tax Code and in the name of a wrong depositor. The Commissioner (Appeals) in the said order has clearly observed that the amount deposited in the name of M/s. Rajeevated Engineering & Allied Products has been debited in the Bank account of M/s. Rajeev & Associates that is the appellant herein. Accordingly, the refund was allowed. No doubt the Service Tax as demanded by the impugned show cause notice was to be deposited against the correct Service Tax Code of the appellant. From para 5.2 of the impugned order, it is apparent that the amount which was allowed to be refunded has been refunded to the appellant, but it is the appellant’s contention that the amount was never refunded and it was understanding that the same shall be appropriated against his liability for the period in dispute. However, there is admittedly no evidence for the deposit of impugned demand in the appellant’s Service Tax Code. But, the record bears the copy ot ST-3 Return as was filed by the appellant for the disputed period. Perusal thereof makes it abundantly clear that the said return is about the impugned amount only and that it was filed on 14.04.2011 itself. Accordingly, irrespective the amount was not actually deposited against the appellants ST Code, the fact remains is that the notice of impugned mistake was to the Department since April 2011 itself. In the given circumstances, the allegations of the Department about suppression of facts on part of the appellant with the mention that the mistake came to the notice only at the time of Audit is not sustainable specially in a case where the duty has been paid, however, to a wrong Excise Code. I draw my support from Devang Paper Mills Pvt. Ltd. vs. Union of India [2016 (41) STR 418 (Guj.) = 2016-TIOL-37-HC-AHM-CX wherein the Hon’ble High Court of Gujarat has held that the consequence of entire payment not being recognised as valid cannot result into harsh consequences incurring further liability of repayment of basic duty with interest and penalties. If the amount is deposited and duly credited in Govt. account, it cannot be treated as non-payment of duty. Above all, it cannot entitle the Department to invoke the extended period of limitation. The period in dispute is of the year 2011. The show cause notice has been issued to the year 2014. The impugned mistake was in the notice of Deptt. since the year 2011. Resultantly, I hold that the show cause notice herein is barred by limitation. Seen from this angle itself, the order under challenge is not sustainable. Same is accordingly set aside. Appeal stands allowed.

(Dictated and pronounced in the Open Court)

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