2019 (3) TMI 1754 - AT - Service Tax

Adjustment of service tax said to be paid in excess to the credit of Central Government against their service tax liability for the subsequent period - Rule 6 (4A) of the Service Tax Rules, 1994 - HELD THAT - The adjustment of service tax paid in excess in certain months towards the service tax liability of the subsequent months cannot be denied on such technical grounds. The issue is no more res-integra in view of the various decisions of the Tribunal. In the case of M/S. JUBILANT ORGANOSYS LTD. VERSUS CCE, MEERUT-II 2014 (10) TMI 138 - CESTAT NEW DELHI , the adjustment of service tax was allowed in terms of Rules 6 (4A) of the Service Tax Rules, 1994 in similar circumstances. The impugned order is set aside to the extent of allowability of adjustment as per the provision of Rule 6 (4A) of the Service Tax Rules, 1994 - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Adjustment of service tax paid in excess against subsequent period's liability.
2. Interpretation of Rule 6(4A) of the Service Tax Rules, 1994.
3. Taxability on collection from Village Telephone Booth (VPT).

Issue 1: Adjustment of service tax paid in excess against subsequent period's liability

The case involved M/s BSNL, Begusarai, registered under "Telephone Services," disputing the Department's disapproval of their adjustment of service tax paid in excess against subsequent liabilities, citing Rule 6(4A) of the Service Tax Rules, 1994. The Adjudicating Authority confirmed a demand of ?26,50,811/- and ordered appropriation of excess amounts paid. The lower appellate authority upheld the order regarding Rule 6(4A) but remanded the issue of taxability on VPT collections. The Tribunal referred to precedents like Jubilant Organosys Ltd. and a recent CESTAT judgment in favor of the appellant, allowing the adjustment of excess service tax towards subsequent liabilities. Consequently, the impugned order was set aside, and the appeal was allowed.

Issue 2: Interpretation of Rule 6(4A) of the Service Tax Rules, 1994

The Tribunal, considering various judicial pronouncements, including the case of Jubilant Organosys Ltd., held that the adjustment of service tax paid in excess against subsequent liabilities cannot be denied on technical grounds. Citing a recent CESTAT judgment in favor of the assessee, the Tribunal established that the issue was settled in favor of the appellants and no longer res-integra. Consequently, the impugned order was set aside, affirming the allowability of adjustment as per Rule 6(4A) of the Service Tax Rules, 1994.

Issue 3: Taxability on collection from Village Telephone Booth (VPT)

Regarding the taxability on collections from VPT, the lower appellate authority remanded the matter for fresh adjudication as per law, setting aside the original order. This issue was not directly addressed in the Tribunal's judgment as the focus was primarily on the adjustment of service tax paid in excess against subsequent liabilities under Rule 6(4A) of the Service Tax Rules, 1994.

In conclusion, the Tribunal's decision in the case of M/s BSNL, Begusarai, clarified the allowability of adjusting excess service tax paid against subsequent liabilities, emphasizing the settled nature of the issue based on previous judicial pronouncements and specific CESTAT judgments. The judgment serves as a significant precedent affirming the appellant's right to such adjustments under Rule 6(4A) of the Service Tax Rules, 1994.