Subscribe to the Bombay Chartered Accountant Journal Subscribe Now!

December 2015

Service tax paid wrongly can be claimed as CENVAT credit.

By Puloma Dalal
Jayesh Gogri
Mandar Telang, Chartered Accountants
Reading Time 1 mins
fiogf49gjkf0d
Facts

The Assessee, a manufacturer, wrongly paid service tax on a non-taxable service and claimed CENVAT credit to that extent. The department argued that if tax was paid wrongly or in excess, the only course open was to claim refund and not to make use of CENVAT credit. The Tribunal ordered in favour of the Assessee and the department is in appeal.

Held

The High Court held that if the assessee had paid the tax that he was not liable to pay and is entitled to certain credits, the availing of the said benefit cannot be termed as illegal and accordingly dismissed the revenue appeal.

Download PDF

You May Also Like

Services of restaurants, hotels, inns, guest houses or clubs with air conditioning facility are liable to service tax and Parliament is competent to levy it.

Recovery u/s. 87 of the Finance Act, 1994 can be resorted to only after an amount is adjudicated to be due to the Central Government.