2013 (7) TMI 626 - AT - Service Tax

Mode of payment of service tax on import of services - Business Auxiliary Services and Consulting Engineering Services assessee paid service tax through CENVAT account department contended that the same should be paid in cash Held that - The payment of service tax can be made through Cenvat Credit during the relevant period appeal decided in favour of assessee.

Summary

Issues:
1. Payment of Service Tax through Cenvat Account vs. Cash through PLA.

Analysis:
The case involved two appeals filed by M/s Kansara Modler Ltd. against an Order in appeal dated 22.11.2010. The appellants had received Business Auxiliary Services and Consulting Engineering Services from service providers located abroad without any establishment in India. The Department contended that Service Tax should be paid in cash through PLA instead of through Cenvat Account. Two Show Cause Notices were issued to the appellants for different periods demanding payment of service tax in cash. The original authority adjudicated against the appellants, leading them to challenge the decision before the Commissioner (Appeals), who upheld the requirement of cash payment but set aside the penalty. The appellants further appealed the decision.

During the hearing, the Tribunal noted that the issues in the present appeal had already been settled in a previous case involving the same appellants. In the earlier order dated 03.04.2013, the Tribunal had ruled that the payment of service tax could indeed be made through Cenvat Credit. Consequently, the Tribunal found no merit in the Commissioner (Appeals)'s decision, set it aside, and allowed the appeals in favor of the appellants.