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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
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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.

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