Custom, Excise & Service Tax Tribunal
Madhya Pradesh Poorv Kshetra Vidyut ... vs Commissioner, Central Excise & ... on 17 April, 2025
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH, COURT NO. 3
E-HEARING
SERVICE TAX APPEAL NO.50029 OF 2023
[Arising out of Order-in-Appeal No. BHO-EXCUS-001-APP-092-22-23 dated
09.09.2022 passed by the Commissioner (Appeals), Central Goods and
Service Tax & Central Excise, Bhopal]
Madhya Pradesh Poorv Kshetra Appellant
Vidyut Vitran Co. Ltd.
Vs.
Commissioner, CGST & Central Excise,
Bhopal (M.P.) Respondent
Appearance:
Present for the Appellant :Shri Rajeev Agarwal, Advocate Present for the Respondent: Shri Manoj Kumar, Authorised Representative CORAM :
HON'BLE MS. BINU TAMTA, MEMBER (JUDICIAL) HON'BLE MS. HEMAMBIKA R. PRIYA, MEMBER (TECHNICAL) Date of Hearing:19.12.2024 Date of Hearing:17.04.2025 FINAL ORDER No.50495/2025 HEMAMBIKA R. PRIYA The present appeal is filed by M/s. Madhya Pradesh Poorv Kshetra Vidyut Vitran Co. Ltd.1 against the Order-in-Appeal No. BHO-
EXCUS-001-APP-092-22-23 dated 09.09.2022 passed by the Commissioner (Appeals), Central Goods and Service Tax & Central Excise, Bhopal wherein he upheld the impugned order-in-original No.01/DC/ST/REF/ SGR/2021 dated 04.06.2021 passed by the Deputy
1. the appellant 2 ST/50029/2023 Commissioner, rejecting the refund of Rs.30,70,575/- & Rs.47,27,305/- under section 11B of the Central Excise Act, 19442 read with the section 83 of the Finance Act, 19943.
2. The brief facts is that the Appellant, M/s. Madhya Pradesh Poorv Kshetra Vidyut Vitaran Co. Ltd., Sagar (MPPKVVCL, Sagar) held Service Tax Registration No.AADCM6175EST002 for payment of Service Tax towards provision of various taxable services under the Finance Act, 1994. The Appellant had filed an application for claiming refund of pre-deposit amount of Rs.30,70,575/- and Rs.47,27,305/-
consequent upon decision of Hon'ble CESTAT, New Delhi, vide Final Orders No. ST/A/51024/2021-CU [DB] dated 14/01/2021 and Final Order no. ST/A/51031/2021- CU [DB] dated 14/01/2021 against the two demand orders passed by the Commissioner, CGST, Jabalpur. On scrutiny, it was observed that the challans had been deposited by a different Service Tax registrant namely Madhya Pradesh Poorva Kshetra Vidyut Vitaran Co. Ltd., Jabalpur (MPPKVVCL, Jabalpur) having Service Tax registration No. AADCM6175EST001. Accordingly, a Show Cause Notice No. IV(10)5/MPPKV/Refund/SGR/198 dated 28.05.2021 was issued proposing rejection of the refund claim. Subsequently, vide Order-in-Original No.01/DC/ST/REF/SGR/2021 dated 04.06.2021 the said refund claim was rejected. Aggrieved by the said Order, the appellant preferred an appeal before Commissioner (Appeals), who vide order-in-appeal No.BHO-EXCUS-001-APP-092-22-23 dated 09.09.2022 dismissed the appeal. Being aggrieved by the said order- in-appeal, the appellant has filed the present appeal before the CESTAT.
2. the Central Excise Act, 1944
3. the Finance Act 3 ST/50029/2023
3. Learned Counsel submitted that the fact that the appellant had made the pre-deposit of the amount is not in dispute. The principal reason for issuance of SCN for rejection of the refund and the order confirming the rejection was that the appellant had made the pre- deposit by mentioning wrong service tax registration number.
4. Learned Counsel contended that the Commissioner (Appeals) had neither taken into consideration nor given any observation on the Chartered Accountant Certificate dated 28.07 2021 and the Affidavit given by Head Office of the appellant certifying that the said pre- deposit challans have neither been applied for any service tax payment nor any refund of the same had been received. He submitted that the observation made by the Commissioner (Appeals) that there is nothing on record to reflect that the disputed amount has not been utilized by the Appellant's Jabalpur Unit or any refund has not already been taken is arbitrary as the appellant had placed on record the Chartered Accountant Certificate and an Affidavit from the Head Office which have been completely ignored. Learned Counsel placed reliance on the judgment of CESTAT in Sahara India TV Network vs. Commissioner of C. Ex. & ST, Noida4 which was not considered by the Appellate Authority. Similarly, the judgment of the CESTAT Kolkata in Commissioner of Central Excise, Haldia vs. M/s Tata Metaliks Ltd.5 was also not considered.
5. Learned Counsel contended that when the pre-deposit amount is not in dispute, the rejection of refund of the same after the case was decided in favour of the appellant, on the ground that such pre-deposit
4. 2016 (41) S.T.R. 145 (Tri-Del.)
5. Service Tax Appeal No.98 of 2010, Final order No. 75500-75501/2023 pronounced on 18t May 2023 4 ST/50029/2023 has been made under an incorrect service tax registration number is merely a technical defect. Such technical defect is verifiable by the Department and therefore, without undertaking any verification, the rejection of refund claim was not sustainable in law.
6. Learned Authorized Representative submitted that the Commissioner (Appeals) while referring to the clarification issued by CBIC towards refund of pre-deposit vide Circular No.984/8/2014-CX dated 16.09.2014, has observed the following:
"6.1. From the above, it can be seen that an assessee in whose favour the appeal has been decided shall be entitled for refund of pre-deposit along with interest. Further, the person who has made payment of such pre-deposit shall file a request letter with the jurisdictional Assistant Commissioner for refund of pre-deposit along with interest. I observe that in the instant case the party/assessee in the orders passed by Hon'ble CESTAT and the party/assessee who has made pre- deposit are two different assessees holding different STC. I am, therefore, of the view that in terms of the provisions contained in the Circular supra, refund of pre-deposit cannot be granted to the Appellant on the strength of challans bearing STC of a different assessee.
7. I observe that in the instant case amount of pre-deposit has been paid against the STC number of same legal person's different registration number."
7. Learned authorized representative further submitted that with regard to the issue of ractification of remittances made against wrong Service Tax Code, the Commissioner (Appeals) had relied on the Trade Notice No. 3/2014-S.T., dated 10.07.2014 issued by Central Excise Commissionerate, Cochin wherein it was stated as follows:
"7.1. Afore-mentioned Trade Notice provides a well defined procedure for rectification of remittance made against wrong STC. I observe that the Appellant did not exercise the option for getting rectification of remittance made against wrong STC by following the procedure prescribed in this regard. I, further, observe that there is nothing on the record to reflect that the disputed amount has not been utilized by the Appellant's Jabalpur Unit and does not surface in its ledger/Books of accounts, I, thus, find 5 ST/50029/2023 that the requirement put forth by the said Trade Notice were not fulfilled. It is also not on record that Appellant's Jabalpur Unit has not already taken refund of the disputed amount of pre-deposit."
(emphasis supplied)
8. In light of the above, learned Authorized Representative has prayed that the Appeal may be dismissed.
9. We have heard the learned Counsel for the appellant and the learned Authorised Representative for the Department. The issue before us is whether the appellant is eligible for refund of pre-deposit made by the appellant under a different registration number. In this context, at the outset, we note that the Central Board of Excise & Customs vide S.T. Circular No.58/7/2003 (F.No.157/2003 Cx. A) dated 10.07.2014 has directed that the assessee cannot be held responsible for payment under wrong accounting code and this matter has to be started with the PAO. The said Circular is reproduced below:
" ST Circular No. 58/7/2003
20th May,2003
F.No. 157/2/2003 CX.4
Government of India
Ministry of Finance & Company Affairs
Department of Revenue
Central Board of Excise & Customs
Subject:- Using a wrong accounting Code for payment of Service Tax clarification- Regarding.
I am directed to say that a representation had been received by the Board raising apprehensions regarding using wrong Accounting Code for payment of Service Tax, whether, amounts to having paid the Service Tax or not.
2. The Board has examined the issue. In this connection, I am directed to clarify that the assessee need not be asked to pay the service tax again. In such cased the matter should be sorted with the P.A.O. As regards to the cases where the assessee was asked to pay service tax again, the amount thus paid may be refunded by the concerned divisional Asst. Commissioner/Deputy Commissioner."
6
ST/50029/2023
10. The admitted facts of the case are as follows:
1. Appellant is registered under Service Tax.
2. Appellant paid Rs.30,70,575/- and Rs.47,27,305/- as pre-deposit while filing their appeal.
3. Vide Final Order dated 14.01.2021, the appeal was allowed by CESTAT.
4. There is no dispute that the said pre-deposit was paid by the appellant under a different registration number.
5. Appellant produced an affidavit and Chartered Accountant Certificate to authenticate the said refund claim.
11. We note that similar issue has been considered in various decisions/judgments which have been cited by the learned Counsel during his submissions. In this context, we note that the Principal Bench of this Tribunal in the case of Sahara India TV Network vs. Commissioner of Central Excise and Service Tax, Noida6 held as follows:
"6. We have considered the contentions of both sides. We find that in the case of K.K. Kedia (supra) CESTAT, in effect, has held that. such adjustment can be permitted while in the case of Plastichemix Industries (supra) such adjustment is held to be not permissible on the ground that there is no provision for that in the Service Tax law. It is evident from the facts of the case narrated that the legal person for both the registrations (one for NOIDA unit and other for Mumbai unit) is the same. Further, it is evident that it is simply a case of wrong, Service Tax registration number having been mentioned in the Service Tax deposit challan. In this case the wrong registration number happens to be of the appellant itself though belonging to its different unit. It could as well have been that by mistake the registration number of a different assessee was mentioned in which case it could not have been asserted that Service Tax was deposited in the account of that assessee whose registration number was wrongly mentioned in the challan
6. 2016(4) S.T.R. 145 (Tri.-Del.) 7 ST/50029/2023 (though its name did not appear therein) and not in the account of the person whose name was mentioned in the challan. Such mistakes can happen and it can scarcely be anybody's case that such mistakes are beyond rectification. In this case, the Assistant Commissioner, Service Tax in-charge of the appellant's Mumbai unit has categorically mentioned that the impugned amount of service tax (Rs. 25 lakhs) deposited has not been utilised towards paying service tax by the Bombay unit. The CESTAT judgment in the case of Plasti chemix Industries (supra) makes a summary observation that there is no provision under the present service tax law for adjustment of service tax payments from the account of one registered unit to the account of another registered unit. It however does not say that there is any provision in the service tax law which prohibits such adjustment. Further, as stated earlier, the issue is not so much of law but of a mistake of incorrectly mentioning the registration number in the service tax deposit challan. That such mistakes do happen is also evident from the fact that Commissionerate of Cochin issued a Trade Notice No. 3/2014- S.T., dated 10-7-2014, the relevant part of which reads as under: -
"Subject: Ratification of remittances made against wrong accounting code and or wrong STC Code/C.Ex. Registration Number -Procedure - Regarding.
There has been number of representations from registered service providers/receivers and Central excise assessees for rectification of mistakes occurred during remittances of service tax or Central excise duty against wrong accounting head and/or incorrect registration numbers.
The Central Board of Excise & Customs vide S.T. Circular No. 58/7/2003 (F.No. 157(2/2003 Cx. A), dated 20-5-2003 has clarified that in such instances the matter should be sorted out with the P.A.O. and the assessee need not be asked to pay Service Tax again. The transfer entries has to be effected by the PAO, as per Pr. Chief Controller of Accounts, New Delhi's letter No. Coord/2(1)/76/e-PAO (Chennai)/13-14/159, dated 4-9-2013 and the Civil Accounts Manual of the PAO, read with letter Chord/2(8)/Cex/13-14/224, dated 1-5- 2014, even for previous years.
The instances, resulting in remittances against wrong Head of accounts/STC numbers/C. Ex. Registration number, are cited below:-
1. Service Tax has been paid in the wrong accounting code of a difference service than which is rendered, where the mistake has occurred under same registration number.
2. Service Tax has been paid against incorrect Accounting Minor Heads of Education Cess, interest, penalty Secondary Higher Education 8 ST/50029/2023 Cess and or vice versa. For eg: interest paid under Secondary Higher Education Cess, etc.
3. Service Tax has been paid against the STC number of another assessee/same assessee's (having multiple registrations) different registration number.
4. Service Tax has been paid against Central Excise Registration number of the assessee instead of Service Tax Code Number or vice versa (major heads-Customs-037, Central Excise-038 and Service Tax-044).
5. Service Tax has been paid against cancelled/surrendered registrations on obtaining centralized registration.
In such instances, in order to ensure uniformity and to avoid hardships to the assessees, the following procedure is prescribed to be followed by the assessee and the field formations.
Case 1.The assessee should represent (Through Range and Division) to the Commissioner of Central Excise and Service Tax, describing the mistake occurred/reasons for such errors along with certified copies of the remittance challans, ST-3 Returns for the relevant period and any other document pertains to the issue to establish the genuine mistake and to ratify the error.
Case 2.Same as above.
Case 3.The assessee should obtain a no objection Certificate from the assessee or any other person against whose registration number to which the wrong remittances have been made by e-payment to transfer the amount from their registration number, certified by the concerned Range Officer of Central Excise/Service Tax that the said amount has not been utilized or paid by him and does not surface in his ledger (Books of accounts) and attach with the representation besides the documents enumerated against Case I above."
As may be observed, para No. '3' and para No. 'Case-3' of the said Trade Note squarely cover the situation obtaining in the present case and lay down a procedure for rectification of such mistake.
7. In the present case, there is complete absence of mala fide and the mistake was brought to the notice of Revenue by the appellant itself. In effect, essentially, overall there has not been any short or delayed payment of service tax by appellant. In these circumstances, the question of penalties would not arise. In these circumstances, even the question of interest would not arise in the wake of C.B.E. & C. Circular dated 20-5-2013 cited above. We are of the view that the procedure prescribed by the 9 ST/50029/2023 Cochin Commissionerate in its Trade Notice dated 10-7-2014/is reasonable for the purpose of rectification of such mistakes without any risk to Revenue.
8. In the light of the foregoing discussion, we set aside the impugned order, allow the appeal and remand the case to the primary adjudicating authority with the direction that the necessary adjustment of the impugned amount of Rs. 25 lakhs be done in accordance with the procedure prescribed in the Cochin Commissionerate Trade Notice dated 10-7-2014 cited above."
11.1 In the instant case as well we note that the appellant had submitted the affidavit and a Chartered Accountant Certificate that the disputed amount has not been utilized nor any refund been taken. Hence, we hold that the instant case stands covered by this decision.
12. We further note that the Coordinate Bench of the Tribunal in the case of Commissioner of Central Excise, Haldia, vs. M/s. Tata Metaliks Ltd.7 held as follows:
"4. The relevant portion of Trade Notice is reproduced below:
Sub: Ratification of remittances made against wrong accounting code and or wrong STC Code / C.Ex. Registration Number Procedure Regarding.
There has been number of representations from registered service providers/receivers and Central Excise assessee for rectification of mistakes occurred during remittances of Service Tax or Central Excise duty against wrong accounting heads and or incorrect registration numbers.
Central Board of Excise & Customs vide S.T. Circular No. 58/7/2003(F. No. 157/2/2003 Cx. A) dated 20/05/2003 has clarified that in such instances the matter should be sorted out with the P.A.O. and the assessee need not be asked to pay Service Tax again. The transfer entries have to be effected by the PAO. As per Pr. Chief Controller of Accounts, New Delhi's letter NO. Coord/2(1)/76/e-PAO(Chennai)/13- 14/159 dated 04/09/2013 and the Civil Accounts Manual of the PAP, read with letter Chord/2(8)/Cex/13-14/224 dated 15/01/2014, even for previous years.
The instances, resulting in remittances against wrong Head of accounts/STC number/C.Ex. Registration numbers are cited below:
7. Service Tax Appeal No.98 & 108 of 2010, Final Order no.75500-
75501/2023 dated 08.05.2023 10 ST/50029/2023
1................................................
2. 2...................................................
3. Service Tax has been paid against the STC number of another assessee/same assessee's (having multiple registrations) different registration number.
4.......................................
5.........................................
In such instances, in order to ensure uniformity and to avoid hardships to the assessees, the following procedure is prescribed to be followed by the assessees and the field formations.
Case 1. The assessee should represent (Through Range and Division) to the Commissioner of Central Excise and Service Tax, describing the mistake occurred/ reasons for such errors alongwith certified copies of the remittance challans. ST- 3 Returns for the relevant period and any other document pertains to the issue to establish the genuine mistake and to ratify the error.
Case 2. Same as above.
Case 3. The assessee should obtain a no objection Certificate from the assessee or any other person against whose registration number to which the wrong remittances have been made by e-payment to transfer the amount from their registration number, certified by the concerned Range Officer of Central Excise/Service Tax that the said amount has not been utilized or paid by him and does not surface in his ledger (Book of accounts) and attach with the representation besides the documents.
................................"
13. Similarly, in the case of Welspun Corp Ltd. vs. C.C.E. & S. T., Rajkot8, the Ahmedabad bench of this Tribunal was dealing with service tax liability which was wrongly paid in service tax registration of Head office instead of Service tax registration of manufacturing unit, the Tribunal relied on Trade Notice No. 03/2014-S.T. dated 10 July 2014 issued by Commissioner of Central Excise, Customs and Service Tax, Cochin Commissionerate read with Circular No.58/7/2003 (F.No.157/2/2003Cx.A) dated 20.05.2003 and held that the service tax paid under different registration but by the same company cannot
8. 2023(2) TMI 780- CESTAT Ahmedabad 11 ST/50029/2023 tantamount to non-payment of service tax and Revenue was given liberty to make necessary adjustment in their account if required. The relevant portion of decision is reproduced below:
"4. We have carefully considered the submission made by both sides and perused the record. We find that in the present case the demand was confirmed only for there as on that the appellant at their Anjar Unit had had not paid the service tax on services received from abroad on reverse charge basis. However, there is no dispute as the same was admitted in the show cause notice as well as in the impugned order that the service tax of Rs.78,17,225/- was deposited by the appellant's head office at Mumbai under different registration number of input service distributor. The appellant's Anjar unit is not a separate entity as the same is part of a single entity i.e. Welspun Gujarat Stahi Rohren Ltd., which isnow known as Welspun Corp Ltd. Therefore, the payment made by head office under different registration number cannot be demanded from the Appellant's Anjar Unit and if at all there is discrepancy of different registration of head office, the department could have adjusted service tax paid by the head office against the service tax due of Appellant's Anjar Unit."
14. From the above circular it is clear that the discrepancy such as payment of service tax under wrong registration can be adjusted against the correct registration for which the service tax is actually due. Accordingly, in the light of the above circular, the department could have made the necessary adjustment while scrutinizing the said refund claim.
15. Similarly, the Hon'ble Gujarat High Court in Devang Paper Mills Pvt. Ltd., Vs. UOI9, held as under:-
"a. 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. It is not even the case of the respondents that the petitioner had any other code by the
9. 2016 (1) TMI 389- GUJARAT HIGH COURT 12 ST/50029/2023 number ADDCD7232FEM001 and for which there was separate manufacturing activity inviting separate duty liability. Indisputably, thus, the petitioner had singular duty liability for which the actual payment was also made. Under the circumstances, the impugned communication dated 05.05.2015 and notice dated 21.07.2015 are quashed. The respondents are directed to give credit of the duty paid by the petitioner for a sum of Rs.22.15 lacs by making necessary accounting entries on the basis that the same was paid at the relevant time. If there after any sum remains unpaid, it would be open for the Department to take further action in accordance with law. The petition was disposed of in the above terms."
16. The above decisions cited by the Appellant are squarely applicable in this case. In view of the same, the Board's Circular and the Trade Notice, we hold that the appellant is entitled for the refund of the pre-deposit.
17. In view of the discussions above, the impugned order is set aside. The appeal is, accordingly, allowed.
(Order pronounced in the open court on 17.04.2025) (BINU TAMTA) MEMBER (JUDICIAL) (HEMAMBIKA R. PRIYA) MEMBER (TECHNICAL) Archana