2014 (7) TMI 1048 - AT - Service Tax

Self adjustment of excess service tax paid - Refund claim of service tax paid earlier - unjust enrichment - assessee is entitled for self adjustment u/r 6(3) of excess service tax paid - revenue argued that assessee did not opt for provisional assessment u/s 6(4) - appellant has already refunded the excess service tax along with credit bill to its customers. - Period of limitation for self adjustment - Held that - excess amount of service tax paid by the assessee can be adjusted against his service tax liability for the subsequent period. Only condition for eligibility of this sub-rule is that if assessee has refunded the value of taxable service and service tax thereon to the person from whom it was received. Appellant claims that appellant has refunded the excess S-T to its customers - this sub-rule is applicable not only to the case of excess payment of service which can be made good in subsequent period and bit also to the case where taxable values are not ascertainable for longer period - sub-rule 6(3) is not dependent on provision of sub-rule 6(4). Moreover there is no time limit prescribed under sub-rule 6(3) for making adjustment - Following decision of assessee s own previous case 2014 (7) TMI 830 - CESTAT NEW DELHI - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
1. Time limitation for filing refund claim.
2. Unjust enrichment in the case.
3. Applicability of Rule 6(3) of the Service Tax Rules, 1994.

Issue 1: Time limitation for filing refund claim:
The appellant, a Regional Centre of Central Mining and Design Institute, filed a refund claim for excess service tax paid to Northern Coalfields Ltd. The Asstt. Commissioner rejected the refund claim as time-barred and hit by unjust enrichment. The Commissioner (Appeals) upheld the rejection for three challans but allowed examination of the claim for the fourth challan. The appellant contended that the limitation should start from the date of acceptance of revised rates by Coal India Ltd. The Tribunal, in a previous case involving a similar issue, held that the excess service tax paid can be adjusted against future liabilities if the value of taxable service and service tax are refunded, without a time limit for adjustment. Consequently, the current matter was remanded to the original authority for considering the claim under Rule 6(3) of the Service Tax Rules, 1994.

Issue 2: Unjust enrichment in the case:
The Commissioner (Appeals) remanded the refund claim for the fourth challan to examine the unjust enrichment aspect. The appellant argued that on final decision of lower rates, the extra amount was refunded to Northern Coalfields Ltd. along with the service tax, negating any unjust enrichment. The Departmental Representative defended the rejection of the claim, stating that the refund arose due to downward revision of rates, not non-provision of services. The Tribunal's decision in the previous case supported the appellant's contention that Rule 6(3) could be applied for adjusting excess service tax paid, irrespective of the provision of services.

Issue 3: Applicability of Rule 6(3) of the Service Tax Rules, 1994:
The appellant cited Rule 6(3) of the Service Tax Rules, 1994, which allows adjustment of excess service tax paid against future liabilities if the value of taxable service and service tax are refunded. The Tribunal's previous ruling emphasized that this adjustment could be made without a time limit, as long as the refund criteria were met. The Tribunal remanded the current case to the original authority to consider the applicability of Rule 6(3) after providing an opportunity for the appellant to be heard.

In conclusion, the Tribunal set aside the impugned order and remanded the matter back to the original authority for a fresh decision on the refund claim based on the applicability of Rule 6(3) of the Service Tax Rules, 1994. The appeal was disposed of by way of remand, following the precedent set in a previous similar case.