2017 (12) TMI 92 - AT - Service Tax

Tribunal allows appeal on disputed credit, citing legal precedents. Appellant's right upheld.

The Tribunal ruled in favor of the appellant, allowing the appeal against the disputed suo moto credit taken by them. The decision was based on legal ... Suo moto adjustment of credit - Held that: - identical issue decided in the case of Sopariwala Exports Pvt. Limited Versus Commissioner of Central Excise, Vadodara [2013 (5) TMI 430 - CESTAT AHMEDABAD], where it was held that the amount paid by mistake cannot be termed as duty in the case on hand. No proceedings against the appellant sustainable for denial suo moto Credit availed by them for the Service tax paid by them, which was not required to pay by them - appeal allowed - decided in favor of appellant. Issues:Appeal against disputed suo moto credit taken by the appellant and sought to be recovered by the Revenue.Analysis:The appellant appealed against an order disputing the suo moto credit taken by them, which the Revenue sought to recover. The appellant had cleared goods to a unit in the SEZ area and inadvertently paid Service Tax, which was not required. Subsequently, the appellant adjusted the Service Tax for the subsequent period, leading to the Revenue disputing the credit. The Tribunal referred to a similar case of Sopariwala Exports P Ltd and quoted relevant observations from the case. The Tribunal analyzed the case of BDH Industries Limited and Motorola India Pvt. Limited to determine the applicability of the law. The Tribunal found that the judgment in Motorola India Pvt. Limited was more relevant and overruled the decision of the Larger Bench in the case of BDH Industries Limited. Ultimately, the Tribunal held that the appellant was entitled to the credit, and the impugned order was set aside, allowing the appeal.The Tribunal emphasized that the appellant's case was similar to the precedent set by Motorola India Pvt. Limited, where a mistake in payment was rectified through adjustments rather than a refund claim. The Tribunal highlighted that the law laid down by the Apex Court supported the appellant's position. Referring to the judgment of the Hon'ble High Court of Karnataka in the case of Motorola India Pvt. Limited, the Tribunal concluded that the appellant had a valid case for availing the credit. The Tribunal held that the appellant's action of adjusting the excess payment should not be denied, as it was in line with legal precedents and did not require any interference. The Tribunal found that the appellant was justified in taking the suo moto credit for Service Tax paid, even though it was not required, and set aside the impugned order, allowing the appeal with consequential relief.In conclusion, the Tribunal ruled in favor of the appellant, allowing the appeal against the disputed suo moto credit taken by them. The Tribunal's decision was based on legal precedents, including the case of Motorola India Pvt. Limited, which supported the appellant's right to adjust the excess payment made inadvertently. The Tribunal held that the appellant's actions were justified and in line with established legal principles, leading to the setting aside of the impugned order and granting of the appeal with consequential relief.