Customs, Excise and Gold Tribunal - Ahmedabad
Cce vs Bayer Diagnostics India Ltd. on 27 April, 2007
Equivalent citations: [2007]11STJ57(CESTAT-AHMEDABAD)
ORDER M. Veeraiyan, Member (T)
1. This is an appeal against the order of Commissioner (Appeals) No. Commr(A)/178/VDR-II/2005, dt. 29.6.05, vide which Commissioner (Appeals) has set aside the order of original authority by which the original authority rejected the refund claim of Rs. 1,91,023/- filed by the respondent.
2. Heard the learned DR for the appellant, none appeared for the respondent and perused the records.
3. The relevant facts, in brief, are as follows:
a) The respondent is rendering the services of repairs and maintenance which became taxable w.e.f. 1.7.03.
b) During the period from July 2003 to March 2004, they paid a sum of Rs. 9,57,578/-. Out of this, Rs. 8,29,863/- was paid in cash and balance amount was paid through service tax account.
c) The respondent was eligible to pay upto 35% of the tax liability through service tax credit and they need to pay only upto 65% by cash. The respondent paid excess in cash even when they had credit accumulated within the maximum limit of 35%.
d) The original authority rejected the refund claim on the ground that there was no bar for the assessee to pay even 100% by cash even if the credit was available and that it was not a case in which the service tax was paid in excess.
4. Commissioner (Appeals) did not agree with the above views and his findings are reproduced below:
In case the service provider, opts not to maintain separate accounts of input service meant for consumption in relation to rendering of such output services which are chargeable to service tax as well as exempted services or non-taxable services, he shall be allowed to utilize service tax credit for payment of service tax on any output service only to the extent of an amount not exceeding thirty-five percent of the amount of service tax payable on such output service.
On a careful consideration of the above Rule and submissions, it is seen that the appellants had paid Service Tax in excess of 65% in cash, payable by them in respect of output service whereas they paid less than 35% from Cenvat Credit accounts, payable by them in respect of output services. Now the question is as to whether payment made in excess can be adjusted towards the less payment made from Cenvat Credit accounts. They also contended that they had paid excess in cash, for which they requested for refund. However, in my view, this amount of excess payment of service tax can be adjusted against the short payment of service tax for the same period in dispute, since the total amount of service tax paid by them is correct and is not disputed. The jurisdictional assistant commissioner is accordingly, directed to take necessary action and allow the adjustment, as stated above.
5. The respondent perhaps, due to ignorance or misunderstanding has not fully utilized the Cenvat credit available to him and paid more than 65% by way of cash and sought the refund. The Commissioner (Appeals) has taken a view that the excess amount of service tax paid in cash can be adjusted by short payment of service tax of the same period in dispute with the total service tax liability remaining the same. It is clearly a case of excess payment of tax when eligible credit is available for payment. Therefore, the order of Commissioner (Appeals) appears to be reasonable and legally sustainable.
6. Appeal by the Department is rejected.
(Dictated and Pronounced in Court)