Research › Search › Judgment

Rajasthan High Court · body

2017 DIGILAW 1513 (RAJ)

Union Of India v. J. K. Laxmi Cement Ltd.

2017-07-07

GOVIND MATHUR, VINIT KUMAR MATHUR

body2017
JUDGMENT Vinit Kumar Mathur, J. —The present appeal has been preferred by the Revenue against the order dated 25-3-2015 passed by the Customs, Excise and Service Tax Appellate Tribunal [2015 (40) S.T.R. 618 (Tri. - Del.)] 2. Briefly the facts giving rise to the present appeal are that during the period of March, 2005-06, the assessee utilised their CENVAT credit amount for the payment of output transportation service. As there was a circular dated 23-8-2007 which directs that on output transportation service, the service tax is required to pay in cash. Since the assessee had utilised the CENVAT credit amount for the payment of service tax. Therefore, the proceedings were initiated against the assessee to pay the service tax in cash. When the matter was pending before the Commissioner (Appeals), a direction was given to the assessee to make a pre-deposit of the entire amount of service tax in cash. The assessee in pursuance to the order passed by the Commissioner (Appeals) deposited the service tax in cash and simultaneously has suo motu credited the same amount of service tax which was paid through the CENVAT credit account. That a show cause notice was issued to deny the suo motu credit taken by the appellant. The proceedings were undertaken and ultimately it was held that the assessee cannot suo motu credit the amount in its account. The Tribunal ultimately held that in view of the Hon''ble Gujarat High Court and Karnataka High Court judgments, the assessee was entitled to suo moto credit the amount in its account as duty cannot be paid twice and it was just the correction/reversal of the entries which was done by the assessee and there was nothing wrong in the same. The Tribunal, therefore, held the action of the assessee to be valid. 3. Aggrieved of the order passed by the Tribunal, the Revenue has assailed the order dated 25-3-2015 vehemently submitting that in view of the circular dated 23-8-2007, the amount with respect to the service tax for payment of GTA can be paid by cash only and, therefore, the reversal of entries or the suo motu credit by the assessee was not permissible by law. 4. We have heard learned counsel for the parties. 5. 4. We have heard learned counsel for the parties. 5. Learned counsel for the revenue submits that in view of the circular as well as provisions of law, the assessee cannot be permitted to reverse the entries and in fact should have applied for refund of the amount due to him. 6. Counsel for the assessee on the other hand has submitted that in view of the judgments of the Hon''ble Gujarat High Court and Karnataka High Court it is only the correction of entries which is being done by the assessee and further the asessee cannot be taxed twice as he has already deposited the demand of service tax by way of cash, therefore, the amount which has been paid through his CENVAT credit account is required to be reversed. 7. The somewhat similar controversy came up before the Gujarat High Court in case of S. Subrahmanyan and Co. v. Commissioner, 2011 (268) E.L.T. 497 which has held as under : - "In the present case, we do not need to expand the issue by examining the question of refund under Section 11B of the Central Excise Act, Since facts are rather peculiar and simple. As held and observed by the Tribunal, the respondent had already paid excise duty of Rs. 3.58 lacs. Part of the VAT was not paid. While paying difference, the respondent erroneously once over-paid the excise duty of Rs. 3.58 lacs. This mistake was detected shortly thereafter and before the end of the month, the respondent made necessary, entries in the Cenvat Register and corrected the mistake. The Tribunal only viewed it as an arithmetical error which the respondent was authorized to correct. Insofar as the finding of the Tribunal that basic excise duty of Rs. 3.58 lacs was already paid by the respondent earlier and it was repaid while depositing the differential VAT duty was concerned, the Department has not raised any serious objection either in this tax appeal or before us through oral submissions. We therefore proceed on such basis. That being the situation, all that the respondent did was to correct the arithmetical error by making necessary entries in the register even before filing the form at the end of the month before the Excise Authorities. We therefore proceed on such basis. That being the situation, all that the respondent did was to correct the arithmetical error by making necessary entries in the register even before filing the form at the end of the month before the Excise Authorities. In the present case, when we find that there was nothing to be adjudicated upon, the mistaken double payment of excise duty made and when the amount is also not very large, we would not like to interfere with the judgment of the Tribunal keeping the larger question of suo motu claim of refund open to be judged in an appropriate case." 8. The Karnataka High Court in case of Commissioner of Central Excise, Bangalore-III v. Motorola India Pvt. Ltd., 2006 (206) E.L.T. 90 (Kar.) which has held as under : - "The Tribunal, after noticing the material facts has chosen to allow the claim on the basis that the amount paid by mistake cannot be termed as duty in the case on hand. The Tribunal also stated that the time-bar does not apply in such cases. Somewhat in similar circumstances, the Apex Court in India Cements Ltd. v. Collector of Central Excise - 1989 (41) E.L.T. 358 has chosen to accept the case of the assessee. The Madras High Court subsequently noticing the judgment of the Supreme Court has also chosen to hold that the claim is reasonable on the facts of this case. In the light of the case laws, we are of the view that the order of the Tribunal does not require any interference by us. No question of law arises. The order is based on the law laid down by the Apex Court." 9. Therefore, in view of the judgment of the Gujarat High Court there is no error committed by the Tribunal while holding that the amount which has already been paid in cash to satisfy the demand of the revenue with respect to the service tax on GTA is fulfilled, there was no question of not reversing the amount paid from their CENVAT credit account. Further, the circular is dated 23-8-2007 and the period in question is March, 2006 to March, 2007, therefore the Tribunal was right in holding that the circular dated 23-8-2007 is having no application. 10. Further, the circular is dated 23-8-2007 and the period in question is March, 2006 to March, 2007, therefore the Tribunal was right in holding that the circular dated 23-8-2007 is having no application. 10. We are of the view that the order passed by the Tribunal is not required to be interfered with as the revenue''s demand for payment of service tax on GTA has already been done by the assessee by paying the service tax amount in cash and, therefore, the amount paid from CENVAT credit account was required to be reversed. 11. Accordingly, there is no force in the appeal preferred by the Revenue, the same is hereby dismissed.