M/S.Sri Ganesh Windpower vs. The Joint Commissioner Of

Facts

The petitioner, M/s. Sri Ganesh Windpower Engineers Private Limited, is an assessee to service tax. The respondents, GST and Central Excise authorities, passed two Orders-in-Original. The first order dated 03.01.2015, for the period April 2010 to September 2010, demanded Rs. 3,45,217/- as interest for belated payment of Service Tax amounting to Rs. 28,62,232/-, and imposed penalties. The second order dated 26.10.2017, for the period April 2010 to March 2011, demanded Rs. 1,68,87,352/- as interest, with a credit of Rs. 1,50,000/- paid on 17.10.2017. The petitioner argued that the Rs. 3,45,217/- paid on 08.10.2015 towards interest for April-September 2010, which was already accounted for in the first order, should have been credited in the second order. A rectification petition was filed, which was rejected by the first respondent on 15.02.2019.

Held

The Court held that the reasoning of the Assessing Authority for rejecting the rectification application was unsustainable. The Court found that the payment of Rs. 3,45,217/- by the petitioner on 08.10.2015 had been recorded by the officer in the proceedings dated 03.01.2015, and was therefore part of the record. In such circumstances, the omission to give credit for this amount in the subsequent Order-in-Original dated 26.10.2017 constituted a mistake apparent on record. The Court quashed the impugned order dated 15.02.2019. The assessing authority was directed to give credit for all amounts remitted by the assessee, including Rs. 3,45,217/-, and pass fresh orders on the rectification applications dated 28.12.2018 and 31.01.2019 within four weeks, after providing a personal hearing to the petitioner. The ratio decidendi is that an admitted payment, recorded in prior proceedings, must be given credit for in subsequent demands covering the same period, and its omission constitutes an error apparent on record justifying rectification.

Key Issues

1. Whether the rejection of the petitioner's rectification petition by the first respondent, on the ground that the payment of Rs. 3,45,217/- was not brought to the notice of the adjudication officer, constitutes an error apparent on record, under Section 74 of the Finance Act, 1994? Petitioner's contention: The petitioner argued that the payment of Rs. 3,45,217/- on 08.10.2015 towards interest for the period April 2010 to September 2010 was already recorded in the first Order-in-Original dated 03.01.2015. Since this period was also covered in the subsequent Order-in-Original dated 26.10.2017, credit for this payment should have been given, and its omission amounted to a mistake apparent on record. The rejection of the rectification petition, therefore, was unsustainable. Revenue's contention: The judgment records no specific argument from the revenue's side regarding the rejection of the rectification petition. However, the reasoning of the Assessing Authority, as stated in paragraph 7, was that the payment was not brought to the notice of the adjudication officer.