TaxTMI 
TaxTMI 
TaxTMI 
2023 (9) TMI 135
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....ppellant has filed the present appeal. 2. In their grounds of appeal, the Appellant stated that there are two issues involved in the present appeal. (i) Denial of utilization of the CENVAT credit for discharging service tax liability in relation to Import of Service, on the ground that these services do not qualify as output services. The Period involved on this issue is March 2009 and the amount confirmed in the impugned order on this count, is Rs. 41,07,195/-. (ii) Denial of inter-adjustment of amount paid within various heads against the liability. The Period involved on this issue is Financial Year 2007-08 and the amount confirmed in the impugned order on this count is Rs.17,45,706. 3. The Appellant stated that as per Rule 3(4)(e) of the Cenvat Credit Rules, 2004, CENVAT credit may be utilized for payment of service tax on any output service. As per Rule 5 of Taxation of Services (Provided from Outside India and received in India) Rules, 2006, taxable services provided from outside India and received in India shall not be treated as output services for the purpose of availing credit of duty of excise paid on any input or service tax paid on any input services under CENVAT....
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.... to Rule 3(4)(e) of the CCR, 2004, w.e.f., 1.7.2012, thus in case the dispute is related to prior period the aforesaid explanation inserted to Rule 3(4)(e) w.e.f., 1.7.2012 is not applicable. 4.4 In the case of Commissioner of Service Tax, Bangalore Versus Arvind Fashions Ltd [2009 (13) S.T.R. 544 (Tri. - Bang.), the Tribunal, Bangalore has held as under: Intellectual Property service received from abroad deemed as output service when person receiving service liable to pay Service tax and accordingly the service tax on deemed output service can be paid by utilizing CENVA credit on input services in view of deeming fiction 4.5 In the case of Commissioner of Service Tax, Bangalore Versus Aravind Fashions Ltd [2012 (25) S.T.R. 583 (Kar.), The Hon'ble High Court has held as under: "In the instant case, though he is the recipient of service tax, the service provider is outside the country. In law, he is treated as a service provider and is levied tax. In other words, the liability to pay tax on the service which he has received is foisted on him under law. It is to discharge the liability he is entitled to use the CENVAT credit which was available with him and therefore the Tribu....
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....of India 2016 (41) S.T.R. 418 (Guj.), the Hon'ble High Court has held as under: "Whatever be the accounting difficulty, when undisputed fact is that the petitioner did pay a certain excise duty, merely mentioning wrong code in the process, cannot result into such harsh consequence of the entire payment not being recognized as valid, incurring further liability of repayment of the basic duty with interest and penalties. Such amount was deposited by the petitioner with the Government of India and it was duly credited in the Government account." 5.3 In the case of Commissioner of Central Excise, Haldia Versus M/S Tata Metaliks Ltd. (Vice-Versa) [2023 (6) TMI 10 - CESTAT Kolkata, it has been held as under : "We find that the Appellant has discharged their Service Tax liability under RCM on GTA services. They have deposited the service tax in the account of Kolkata Commissionerate (AABCT1389BST002) instead of Haldia Commissionerate (AABCT1389BST001). The mistake in remittance of service tax in a difference service tax registration of the same assessee is a matter of internal adjustment at department's end and the assessee cannot be saddled with the demand of service tax again. Thi....
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....e also submitted that service tax cannot be used to pay Education Cess or SHE Cess and vice versa. Hence, excess payment, if any, made in service tax cannot be adjusted against Education Cess and SHE Cess. Accordingly, they prayed for upholding the impugned order. 8. Heard both sides and perused the appeal records. 9. We observe that the impugned order covers two issues. The first issue is with respect to denial of utilization of the CENVAT credit for discharging service tax liability in relation to Import of Service. The department's contention is that Rule 3(4)(e) of Cenvat Credit Rules,2004 prohibits such utilization. In the impugned order it is alleged that these services do not qualify as 'output services' and hence Cenvat credit cannot be utilized for payment of service tax liability on 'import services'. 10. We observe that the interpretation of Rule 3(4) of the Cenvat Credit Rules, 1994 by the Ld. Commissioner in the impugned order is legally not tenable. We find that an 'Explanation' has been added to Rule 3(4)(e) of the Cenvat Credit Rules, 2004, w.e.f.01.07.2012, to the effect that Cenvat credit cannot be used for payment of service tax in respect of servi....
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....d, the Appellant has paid service tax in excess on some months and short paid Education Cess and SHE Cess on some months. The department has taken into account only the amount of service tax and Education Cess/SHE Cess short paid and confirmed Rs.17,45,706 in the impugned order. The excess/short payment of service tax and Education Cess/SHE Cess on various months during the period in dispute is furnished below: Month Service Tax Edu. Cess SHE Total Service Tax Edu. Cess SHE Total Diff ere nce May 07 3,268,351 65,367 2,150 3,335,868 3,270,237 43,738 21,869 3,335,844 (24) June 3,053,910 61,078 18,622 3,133,611 3,068,062 43,754 21,877 3,133,693 82 July 5.458.567 109.171 22.849 5.590.587 5.473.841 77,829 38,914 5,590,584 (3) Aug. 5,257,492 105,150 50,653 5,413,296 5,317,767 63,687 31,843 5,413,297 1 Sept. 8,914,597 178,292 65,163 9,158,052 8,977,089 120,640 60,321 9,158,050 (2) Oct. 9,406,480 188,033 28,582 9,623,095 9,424,571 132,350 66,175 9,623,096 1 Nov. 4,145,114 82,902 38,997 4,267,014 4,224,916 28,065 14,032 4,267,013 (1)....