Cenvat credit clerical error defeats service tax demand and penalties where no excess credit or short payment occurred.

Service tax demand and penalties for alleged double availment of Cenvat credit were held unsustainable where the records showed that the second invoice credit had not been taken at all and the duplication arose only from a clerical error in the ST-3 annexure. The differential amount was already paid, no short payment occurred, and no excess credit was actually availed. On verification, the position was accepted as a data-entry mistake rather than wrongful credit utilisation, so the demand and penalty were set aside.

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Issues: Whether the demand of service tax and education cess, along with penalties, was sustainable on the allegation that Cenvat credit had been taken twice on the same invoice.

Analysis: The record showed that the credit relating to the second invoice had not been taken at all, and the apparent duplication arose from a clerical mistake in the ST-3 annexure where the earlier invoice was repeated. The differential amount was already paid, there was no short payment, and no excess Cenvat credit had in fact been availed. On verification, even the departmental representative accepted that the position was one of data entry error rather than wrongful availment of credit.

Conclusion: The demand and penalties were unsustainable and were set aside.

Final Conclusion: The assessee was held not liable for the alleged duplicate credit entry, and the impugned order was overturned with consequential relief.

Ratio Decidendi: Where the records show that the alleged duplicate credit entry is only a clerical or data-entry mistake and no excess credit or short payment actually occurred, the demand and penalty cannot be sustained.

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