2023 (3) TMI 1369 - AT - Service Tax

Refund of Excess Service Tax paid - rejection on the ground of being time barred - Sub Rule (1A) of Rule 6 of Service Tax Rules 1994 - HELD THAT - Whatever has been paid in excess of due is treated as advance payment to the Central Government. It is much similar to the payments made to account current which is popularly known as PLA. It has been held several times that the amounts lying in PLA are assessee s property and he can take refund of the same any time he wants and limitation is not applicable to the same. In the similar manner any amount which is paid as advance under Sub Rule (1A) of Rule 6 of Service Tax Rules 1994 limitation would not apply. Limitation is to apply only to such quantum of amount which is paid as Service Tax. The impugned order set aside - the original authority are directed to issue the cheque of refund to the appellant - appeal allowed.

Summary

Issues:
The issues involved in the judgment are the excess payment of Service Tax by the appellant, the applicability of limitation on refund claims, and the interpretation of Rule 6 of Service Tax Rules, 1994.

Excess Payment of Service Tax:
The appellant, a service provider, made excess cash payments of Rs. 83,750/- from October 2014 to March 2015 and Rs. 2,344/- from April 2015 to September 2015. The appellant filed a refund claim for the excess amounts paid. The Revenue contended that the payments were hit by limitation as they were made in 2015. The original authority and the Commissioner (Appeals) rejected the refund claim, leading the matter to the Tribunal.

Applicability of Limitation on Refund Claims:
The appellant argued that the excess payments were not towards Service Tax but were treated as advance payments to the Central Government. The appellant relied on Rule 6 of Service Tax Rules, 1994, specifically Sub-Rule (1A), which allows for advance payment of Service Tax. The Tribunal noted that excess payments are considered advance payments, akin to payments to the account current (PLA), and held that limitation does not apply to such advance payments. The Tribunal referred to previous decisions supporting this interpretation and directed the original authority to issue a refund to the appellant.

Interpretation of Rule 6 of Service Tax Rules, 1994:
The Tribunal examined Rule 6 of Service Tax Rules, 1994, and concluded that any amount paid in excess of the due amount is considered an advance payment to the Central Government. The Tribunal emphasized that limitation applies only to the quantum of amount paid as Service Tax, not to advance payments. Therefore, the Tribunal set aside the impugned order and allowed the appeal, directing the refund to the appellant.