Page 224 - ELT_1st August 2020_Vol 373_Part 3

406 EXCISE LAW TIMES [ Vol. 373

has been paid by the appellants mistakenly believing that the same
was payable and they have also taken the credit of the same under the
bona fide belief that such credit was available. Considering the fact that
the appellants have taken only credit of tax paid by them which in the
first instance was not payable, there can be no demand against them
as no revenue has been lost to the exchequer by merely taking credit
of the amount which in the first place was not recoverable from them.
Hence, ends of Justice would be met if the demand is set aside along
with the demand of interest and penalty. The view taken by me above
finds support from the decision of the Hon’ble High Court of Punjab
and Haryana in the case of M/s. V.G. Steel Industry v. CCE - 2011-
TIOL-338-HC-P-H-CX where it has been held that when duty was
paid in excess of what was payable, CENVAT credit cannot be denied
unless the excess duty paid has been refunded.
From the above judgments, it is clear that even if the service tax is not
required to be paid and if the assessee pay the service tax, the same
can be taken as Cenvat Credit. In the present case, since on the GTA
service their Allahabad unit has already paid the service tax, the ap-
pellant was not required to pay the service tax once again therefore
the service tax paid by the appellant is admissible as Cenvat Credit to
the appellant. Following the ratio of the above judgment, I am of the
considered view that the appellant is entitled for the Cenvat Credit.
The impugned order is set aside and the appeal is allowed.
5.2 In the case of Sterlite Industries (I) Ltd. (Supra) on the similar issue
following order was passed :-
“5. It has not been contested by the appellants that Service tax was not
payable in respect of rail transport. The Department has also proceeded on
the basis that rail transport service was not taxable prior to 1-5-2006. Hence,
the tax amount of Rs. 2,25,702/- which was paid by the appellants was not
at all due to the exchequer. However, the amount has been paid by the ap-
pellants mistakenly believing that the same was payable and they have also
taken the credit of the same under the bona fide belief that such credit was
available. Considering the fact that the appellants have taken only credit of
tax paid by them which in the first instance was not payable, there can be
no demand against them as no revenue has been lost to the exchequer by
merely taking credit of the amount which in the first place was not recover-
able from them. Hence, ends of justice would be met if the demand is set
aside along with the demand of interest and penalty. The view taken by me
above finds support from the decision of the Hon’ble High Court of Punjab
and Haryana in the case of M/s. V.G. Steel Industries v. CCE, 2011-TIOL-338-
HC-P-H-CX where it has been held that when duty was paid in excess of
what was payable, CENVAT Credit cannot be denied unless the excess du-
ty paid has been refunded.”
5.3 This Tribunal in the case of Nahar Granites Ltd. (Supra) passed the
following order :-
“4. We have heard both sides and perused the records. The issue involved
in this appeal is whether Cenvat credit can be taken by the recipient on the
inputs on which no duty was payable at the supplier’s end. It is seen from
the case laws relied upon by the appellant that this issue has been decided
in favour of the recipient assessee when excess duty is paid or duty is paid
under protest. In the case of MDS Switchgear Ltd v. CCE Aurangabad [2001
EXCISE LAW TIMES  1st August 2020  224