M/S. Sahara India Tv Network vs C.C.E.&S.T., Noida

1. Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2. Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3. Whether Lordships wish to see the fair copy of the order? Seen 4. Whether order is to be circulated to the Department Authorities? Yes

Appeal No.ST/52749/2014-ST[SM]

[Arising out of Order-in-Appeal No.224/NOI/EXCUS/ 000/APPL/13,14, dated 29.11.2013 passed by the C.C.E.&S.T.(Appeals), Noida]

M/s. Sahara India TV Network Appellant

Vs.

C.C.E.&S.T., Noida Respondent

Appearance

Mr. Archit Agarwal, C.A. - for the appellant

Mr. Govind Dixit, DR - for the respondent

CORAM: Honble Justice G. Raghuram, President

Honble Mr. R.K. Singh, Member (Technical)

Final Order No.52888/2015, dated 13.08.2015

Per Mr. R.K. Singh :

Appeal has been filed against Order-in-Appeal dated 29.11.2013 which upheld the Order-in-Original dated 12.03.2013 in terms of which service tax demand of Rs.25 lakhs was confirmed along with interest and penalties.

2. The facts of the case are as under:-

Appellant is a trader having two outfits; one located in NOIDA and the other in Mumbai. Both outifts have separate service tax registrations. While paying service tax for the period April, 2009 to September, 2009 the NOIDA unit deposited Rs.25 lakhs but in the challan by mistake mentioned the registration number of its Mumbai unit. After some time on realising the said mistake, appellant moved an application before the concerned authorities that it inadvertently paid the said amount by mentioning the registration number of its Mumbai unit and requested that the said amount be counted towards its NOIDA unit. The request of appellant was not accepted and the Show Cause Notice was issued demanding the said amount of service tax along with interest and penalties which are confirmed by the primary adjudicating authority and also upheld by the Commissioner (Appeals).

3. When the appeal came up before CESTAT, the single-Member Bench of CESTAT noticed that there are conflicting decisions in this regard in-as-much-as while in the case of CCE Bhopal Vs. KK Kedia  [2014 (35) SDR 383 (TRI  Delhi)], such adjustment had been permitted, CESTAT in the case of Plastichemix Industries Vs. CCE&ST, Vadodara vide Order No.A/11151/2014 dated 27.06.2014 held that there was no provision for such adjustment. Consequently, the single-Member Benches of CESTAT put up the matter before the Hon'ble President, CESTAT for referring the same to the Larger Bench. The Hon'ble President ordered accordingly. That is how the matter came up before this Divisional Bench.

4. During hearing, appellant contended that (i) the mistake happened in September, 2006 and it was detected in October, 2006 when it wrote to the Superintendent, Service Tax, NOIDA that it had deposited Rs.25 lakhs vide challan No.50048 dated 25.09.2010 under service tax registration of its Bombay unit instead of writing service tax registration of its NOIDA. (ii) The Assistant Commissioner of Service Tax Division, Bombay vide letter dated 06.07.2011 addressed to the Superintendent, Central Excise, NOIDA confirmed that the amount of Rs.25 lakhs paid by the challan number 50048 dated 25.09.2010 has not been utilised for discharging any service tax liability by appellant. (iii) It also cited Trade Notice No.,3/2014/ST dated 10.07.2014 issued by Commissioner, Cochin which had prescribed procedure for rectification of such mistake.

5. The ld. Departmental Representative, on the other hand, stated that the appellant is not having centralised registration and therefore such adjustment is not permitted.

6. We have considered the contentions of both sides. We find that in the case of KK 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 (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 anybodys case that such mistakes are beyond rectification. In this case, the Assistant Commissioner, Service Tax in charge of the appellants 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 judgement in the case of Plastichemix 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  60 dated 10.07.2014, the relevant part of which reads as under:-

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 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 20/05/2003 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 has to be effected by the PAO, as per Pr. Chief Controller of Accounts, New Delhis letter No.Coord/2(1)/76/e-PAO (Chennai)/13-14/159 dated 04/09/2013 and the Civil Accounts Manual of the PAO, read with letter Chord/2(8)/Cex/13-14/224 dated 1/05/2014, 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 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 assessees (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 CBEC Circular dated 20.05.2013 cited above. We are of the view that the procedure prescribed by the Cochin Commissionerate in its Trade Notice dated 10.07.2014 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 10.07.2014 cited above.

(Justice G. Raghuram)

President

(R.K. Singh)

Member (Technical)

SSK

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