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of <h1>Appeal granted for double tax payment, Tribunal upholds credit entitlement, citing legal precedents.</h1> The Tribunal allowed the appeal, setting aside the denial of suo moto credit for service tax payment through the cenvat credit account. The appellant's ... Denial of CENVAT Credit - output transportation service - Circular No. 97/08/2007 dated 23.08.2007 - Held that:- Since appellant has paid service tax by availing cenvat credit as well as in cash. Therefore, the following decision of the Hon'ble High Court of Karnataka in the case of Motorola India Pvt. Ltd. (2006 (7) TMI 223 - HIGH COURT OF KARNATAKA AT BANGALORE) and as S. Subramanyan & Co. (2014 (3) TMI 316 - GUJARAT HIGH COURT ) of the Hon'ble High Court of Gujarat, I hold that appellant has correctly taken the suo moto credit. - Decided in favour of assessee. Issues:Appeal against denial of suo moto credit for service tax payment through cenvat credit account.Analysis:The appellant appealed against the denial of suo moto credit for utilizing cenvat credit account to pay service tax on output transportation service. The case involved a Circular No. 97/08/2007 directing cash payment for service tax on output transportation service, which the appellant contravened by using cenvat credit account. The lower authorities rejected the suo moto credit, leading to the appeal. The appellant argued they had paid the tax twice - through cenvat credit and in cash - justifying the suo moto credit. They cited precedents like Esdee Paints Ltd. and decisions from the Hon'ble High Courts of Gujarat and Karnataka in support of their claim.The opposing party contended that the appellant should have paid the service tax in cash as per the circular and questioned the validity of the suo moto credit. The adjudicating authority observed the appellant's actions post the cash payment, highlighting the unauthorized re-crediting of the amount paid in cash. The authority emphasized that the stay order only directed cash payment, not re-crediting, deeming the appellant's actions legally incorrect. The appellant's reliance on previous cases was challenged, with a strong emphasis on the decision of the Larger Bench in BDH industries Ltd.Upon hearing both parties, the Tribunal analyzed the case, noting that the Circular No. 97/8/2007 was issued after the disputed period, thus not applicable. The key issue was whether the appellant could claim suo moto credit for paying the service tax twice - through cenvat credit and cash. The Tribunal referenced the Esdee Paints Ltd. case, where it was held that such correction of entries was justified when tax was paid in cash after utilizing credit. The Tribunal also highlighted the conflicting decisions of the Larger Bench and the Hon'ble High Court of Karnataka regarding the availability of suo moto credit for double tax payment. Relying on the decisions of the Hon'ble High Courts of Karnataka and Gujarat, the Tribunal concluded that the appellant was entitled to the suo moto credit for the double payment of service tax.In conclusion, the Tribunal set aside the impugned order and allowed the appeal, granting consequential relief if applicable. The decision was based on the appellant's entitlement to claim suo moto credit for paying the service tax twice, as supported by legal precedents and court decisions.
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