2010 (7) TMI 381 - AT - Service Tax

Cenvat credit - assessees paid service tax by mistake, payment was made even though the service was not taxable at that point of time and they subsequently took credit of the tax paid - assessees also had not disputed that they were not entitled to credit but only argued that the demand is barred by limitation as there was no suppression on their part and therefore, notice should have been issued within the normal period of limitation - They submit that at the time of taking the credit of tax paid by mistake, they were under the bona fide belief that they were eligible to credit - extended period of limitation invoked against the assessees demand sustainable, appeal dismissed

Summary

The Appellate Tribunal CESTAT, Chennai upheld the demand for service tax paid by mistake by assessees, who took credit of the tax paid. The assessees argued that the demand is barred by limitation, but the tribunal found no basis for their belief that they were entitled to credit. The tribunal invoked the extended period of limitation against the assessees and dismissed the appeal.