2013 (7) TMI 330 - AT - Service Tax

Payment of service tax under wrong category assessee contended that as per Board s clarification vide Circular No. 58/07/2003-CX (ST) dated 20/05/2003, if an assessee has paid service tax under a wrong accounting code, they should not be asked to pay the service tax again - Held that - Appellant was not required to pay service tax again inasmuch as they have remitted their liability to the exchequer, though under a wrong accounting code - the assessee is not liable to pay service tax if he has discharged the service tax liability even though under a wrong accounting code as decided in Pepsico India Holding Pvt. Ltd. vs. Commissioner of Central Excise, Allahabad (2010 (4) TMI 521 - CESTAT NEW DELHI ) appeal decided in the favour of the assessee.

Summary

Issues:
- Appeal against Order-in-Appeal for non-payment of service tax under wrong accounting code.

Detailed Analysis:
1. Issue of Wrong Accounting Code: The appellant, a stock broker, had discharged service tax liability under the wrong accounting code for education cess instead of the correct one. The department issued a notice for non-payment under the proper code, leading to a demand confirmed by an order. The appellant appealed this decision, arguing that according to a Board's clarification in Circular No. 58/07/2003-CX (ST), if service tax is paid under a wrong code, the assessee should not be asked to pay again but resolve the matter with the PAO. The appellant cited a Tribunal decision in Pepsico India Holding Pvt. Ltd. vs. Commissioner of Central Excise, where a similar issue was addressed, and the Tribunal ruled in favor of the assessee, holding that payment under a wrong code does not necessitate double payment.

2. Legal Interpretation: The appellant's consultant relied on the Tribunal's decision in Pepsico India Holding Pvt. Ltd. case and the Board's circular to support the argument that once the service tax liability is discharged, even if under an incorrect code, there is no obligation to pay again. The Superintendent (AR) agreed with this position, leading to the Tribunal's decision to set aside the impugned order and allow the appeal. The Tribunal concurred with the appellant's contention that since they had paid the service tax liability, the incorrect accounting code used did not warrant a double payment.

3. Conclusion: The Tribunal, after considering the arguments, circular, and precedent, found in favor of the appellant, emphasizing that the payment of service tax under a wrong accounting code, when the liability has been remitted, does not necessitate additional payment. Therefore, the impugned order was set aside, and the appeal was allowed in favor of the appellant, M/s Arcadia Share & Stock Brokers Pvt. Ltd., Goa.