2016 (12) TMI 227 - AT - Service Tax

Service provider wins appeal due to bank error in tax payment, court sets aside tax demand order

The appeal was allowed as the appellant, a service provider, successfully demonstrated that the service tax demand was unjustified due to a bank error in ... Service tax - demand confirmation for non-verification of payment - payment deposited in wrong head by bank - rectification of payment and certificate from PLA Account Officer - consequential reliefDemand confirmation for non-verification of payment - payment deposited in wrong head by bank - rectification of payment and certificate from PLA Account Officer - service tax - Whether the confirmed service tax demand for alleged non-verification of payment can be sustained when the appellant produces evidence that the bank initially deposited the amount in a wrong head which was subsequently rectified and certified by the PLA Account Officer, New Delhi. - HELD THAT: - The Tribunal examined the documents produced by the appellant and found that the payment, though initially deposited by the bankers under an incorrect head, was subsequently rectified. A certificate from the PLA Account Officer, New Delhi, corroborated the transfer of the said amount to the correct account. On verification of these records the Tribunal concluded that the payment made by the appellant was in fact correct and that the basis for confirming the demand-non-verification of payment-no longer subsisted. Consequently the impugned order confirming the demand lacked merit and was liable to be set aside. [Paras 4]Impugned order set aside; appeal allowed with consequential relief.Final Conclusion: The Tribunal allowed the appeal, setting aside the order confirming service tax demand after finding that the payment wrongly deposited by the bank had been rectified and certified by the PLA Account Officer, and granted consequential relief. Issues:Appeal against demand of service tax due to non-verification of payment.Analysis:The appellant, a service provider, appealed against an order confirming a service tax demand due to non-verification of payment. The appellant was registered under the category of 'Business Auxiliary Services.' The issue arose because the payment made by the appellant could not be verified as it was deposited in the wrong head by the bank. The appellant contended that the amount was paid in the proper head, and the bank later issued a certificate confirming the transfer of the amount to the correct account in New Delhi.The appellant's counsel argued that the bank had mistakenly deposited the service tax in the wrong head, but the appellant had rectified this error. The appellant provided all necessary evidence to support this claim. Upon verification of the documents presented, it was established that the payment, initially deposited incorrectly by the bank, had been rectified, and a certificate to this effect was obtained from the PLA Account Officer in New Delhi. Consequently, the impugned order had no merits as the payment made by the appellant was deemed correct.In light of the evidence and submissions, the impugned order was set aside, and the appeal was allowed with any consequential relief deemed necessary.