Re-credit for duplicate service tax payment allowed where earlier Cenvat debit was mistaken and payment was made twice.

Where service tax or duty has been paid twice, once through Cenvat credit and again in cash, the earlier credit entry may be corrected by taking re-credit of the amount already debited. The Tribunal treated the disputed circular as irrelevant to the period in issue and held that denial of re-credit merely because it was taken suo motu was unsustainable. Later High Court decisions recognising correction of excess or duplicate payment were followed, and the contrary Larger Bench view was not applied. The assessee was therefore entitled to the suo motu credit.

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Issues: Whether the assessee was entitled to take suo motu credit after paying the same service tax twice, once through Cenvat credit and again in cash.

Analysis: The disputed circular had no relevance to the period in issue. The decisive question was not the original mode of payment, but whether a tax amount paid twice could be corrected by taking credit for the earlier debit. The Tribunal followed the view that where payment is made both through credit and in cash, the earlier credit entry is only a mistaken debit that may be reversed, and denial of such correction merely because it was taken suo motu is unsustainable. The contrary Larger Bench view was treated as not governing in light of the later High Court decisions recognising such re-credit in cases of excess or duplicate payment.

Conclusion: The assessee was entitled to take the suo motu credit.

Ratio Decidendi: When service tax or duty has been paid twice, the assessee may correct the mistaken debit by taking re-credit of the amount earlier paid through credit, and such correction cannot be denied merely on the ground that it was made suo motu.

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