Clerical error in tax code cannot defeat adjustment of admitted excise duty payment against the correct liability.

An excise duty payment made through electronic transfer under the wrong service tax code, due to a clerical error, could not be refused adjustment against the taxpayer's admitted central excise liability for the same period. The liability for March 2014 was undisputed and the payment was made on the due date; only the tax code was incorrectly entered, causing the amount to be credited to the wrong head. As no service tax liability existed for that amount, internal instructions or closure of accounts could not justify retaining the payment under an inapplicable head while requiring fresh payment under the correct excise head. The taxpayer was therefore entitled to adjustment, and the refusal was unsustainable.

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Issues: Whether an excise duty payment made through electronic transfer under an incorrect service tax code, due to a clerical mistake, could be refused adjustment against the petitioner's actual central excise liability for the same period.

Analysis: The liability to pay excise duty for March 2014 was admitted and the payment of Rs. 5,04,700 was made on the due date. The only mistake was that the wrong tax code was entered, resulting in the amount being credited to the service tax head instead of the excise head. The amount was not payable under the service tax head, and the department itself accepted that the insertion of the wrong code was an error. In such a situation, internal instructions or closure of accounts could not justify retaining the payment under a head where no liability existed and simultaneously insisting that the assessee again pay the same amount under the correct head.

Conclusion: The petitioner was entitled to have the payment adjusted towards its excise duty liability, and refusal to do so was unsustainable.

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