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 depositing the payment in the wrong account initially. The appellant rectified the error, providing evidence and a certificate confirming the correct payment. The court found in favor of the appellant, setting aside the order confirming the tax demand and granting any necessary relief.

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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.

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