2019 (2) TMI 681

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....es. In respect of some services rendered by them, they had charged their clients for their services more than what should they have paid. Thereafter, they had raised credit notes thereby returning the excess amount which they collected from the customers. As they initially charged excess amount from their clients, they have also paid excess service tax. The additional amount of service tax which they have paid can be taken back as credit by them under Rule 6(3) of Service Tax Rules, 1994. Instead of taking credit under Rule 6(3) of Service Tax Rules, 1994 the appellant took this excess amount of service tax paid as CENVAT credit. This mistake came to light when the appellant were subjected to audit. The Superintendent (CAAP) Audit-Gr-III vi....

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....the extend as detailed below: "(3) where an assessee has issued an invoice, or received any payment, against a service to be provided which is not so provided by him either wholly or partially for any reason, the assessee may take the credit of such excess service tax paid by him, if the assessee,- (a) has refunded the payment or part thereof, so received along with the service tax payable thereon for the service to be provided by him to the person from whom it was received; or (b) has issued a credit note for the value of the service not so provided to the person to whom such an invoice had been issued"; Accordingly, the appellant filed revised ST-3 returns with the Range for the relevant period deducting the amount....

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....hey have just done so as per the directions of the audit. Under these circumstances there is no case to recover the CENVAT credit as the amount has been already reduced by them in their revised returns prior to issue of show cause notice. Therefore, there is no case to impose penalties under CENVAT Credit Rules, 2004 or under Section 77 & 78 of the Finance Act, 1994. 5. Learned Departmental Representative reiterates the findings of the lower authority. 6. I have considered the arguments on both sides and perused the records. Admittedly, the appellant made a mistake in taking credit of excess service tax paid in CENVAT account instead of taking it under Rule 6(3) of the Service Tax Rules. This mistake was pointed out by the audit speci....