Tribunal permits service tax payment via Cenvat Account, overturns cash payment requirement

The Tribunal overturned the Commissioner (Appeals)'s decision and allowed the appeals in favor of M/s Kansara Modler Ltd. The Tribunal ruled that payment of service tax through Cenvat Account was permissible based on a previous case involving the same appellants, where it had been established that service tax could be paid through Cenvat Credit. The Tribunal found no merit in the requirement for cash payment through PLA, setting aside the penalty imposed on the appellants.

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Issues:
1. Payment of Service Tax through Cenvat Account vs. Cash through PLA.

Analysis:
The case involved two appeals filed by M/s Kansara Modler Ltd. against an Order in appeal dated 22.11.2010. The appellants had received Business Auxiliary Services and Consulting Engineering Services from service providers located abroad without any establishment in India. The Department contended that Service Tax should be paid in cash through PLA instead of through Cenvat Account. Two Show Cause Notices were issued to the appellants for different periods demanding payment of service tax in cash. The original authority adjudicated against the appellants, leading them to challenge the decision before the Commissioner (Appeals), who upheld the requirement of cash payment but set aside the penalty. The appellants further appealed the decision.

During the hearing, the Tribunal noted that the issues in the present appeal had already been settled in a previous case involving the same appellants. In the earlier order dated 03.04.2013, the Tribunal had ruled that the payment of service tax could indeed be made through Cenvat Credit. Consequently, the Tribunal found no merit in the Commissioner (Appeals)'s decision, set it aside, and allowed the appeals in favor of the appellants.

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