Procedural defect in tax remittance cannot override actual payment when service tax is already credited to the Government account.

Service tax already remitted through the DOT Cell and credited through the Government treasury mechanism could not be treated as unpaid merely because it was not paid in the prescribed TR-6 challan at the designated bank. The Tribunal treated the deviation as a procedural defect, not a substantive default, because the record showed actual payment and the proper course was verification of receipt in the Government account. On that basis, the demand for service tax, interest and equal penalty was held unsustainable and the confirming order was set aside in favour of the assessee.

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Issues: Whether service tax paid through the DOT Cell by cheque and ultimately credited through the Government treasury mechanism could be treated as non-payment merely because it was not paid in the prescribed TR-6 challan in the designated bank, and whether the demand, interest and equal penalty could therefore be sustained.

Analysis: The payment of service tax was not disputed; the controversy was confined to the mode of remittance. The earlier order treated the departure from the prescribed challan procedure as equivalent to non-payment. The Tribunal held that the amount had already been paid and that the defect, if any, was only procedural. Since the record did not justify treating an already remitted tax amount as unpaid, the demand could not be sustained merely on the ground of non-compliance with the payment format. The Tribunal also relied on its earlier view that verification of actual receipt in the designated Government account was the proper course, rather than raising the demand again with interest and penalty.

Conclusion: The demand of service tax, interest and equal penalty was unsustainable, and the order confirming them was set aside in favour of the assessee.

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