2016 (7) TMI 726 - AT - Service Tax

Extended period of limitation - Banking and other Financial Service - adjustment of excess payment of service tax - service tax alleged to have been adjusted without adhering to the provisions of Rule 6(4A) and 6(4B) of Service Tax Rules, 1994 - Held that - suppression of facts etc. cannot be established and the demand invoking extended period is not sustainable as the same is hit by limitation of time - Decided against the revenue.

Summary

Issues: Revenue appeal against order setting aside demand, interest, and penalty - Adjustment of excess tax paid - Allegation of suppression and willful intention to evade payment - Grounds of limitation - Case laws relied upon by Commissioner (Appeals) - Previous Tribunal decision on identical issue.

In this case, the appellant, the revenue, challenged an order passed by the Commissioner (Appeals) that set aside the demand, interest, and penalty. The respondents, registered under the category of "Banking and other Financial Service," had paid excess tax amounting to ?16,41,790 during certain months and later adjusted this excess amount during other months. A show cause notice was issued demanding ?13,41,790 for alleged non-adherence to specific provisions of the Service Tax Rules, along with interest and penalty under the Finance Act, 1994. The lower authority confirmed the demand, interest, and penalty. The appellant then appealed against this order, and the Commissioner (Appeals) allowed the appeal based on the ground of limitation, leading the revenue to approach the Tribunal.

The Commissioner (Appeals) found that there was no documentary evidence supporting the charge of suppression or willful intention to evade payment of service tax. The Commissioner noted that the adjustment of excess payment of service tax was not a case of suppression, as the relevant details were disclosed in the half-yearly returns filed with the department. It was also highlighted that the department was aware of these facts for over a year, and therefore, the demand invoking the extended period was deemed not sustainable due to the limitation of time. The Commissioner (Appeals) relied on various case laws to support this decision.

Moreover, the Tribunal referred to a previous decision in the respondent's own case where a similar issue was dismissed, further strengthening the argument that there was no infirmity in the impugned order. The Tribunal upheld the decision of the Commissioner (Appeals) and dismissed the appeal by the revenue.

In conclusion, the Tribunal found in favor of the respondents, emphasizing the lack of evidence for suppression or willful intention to evade payment, the adherence to disclosure requirements, the grounds of limitation, and the precedent set by a previous decision on the same issue. The appeal by the revenue was dismissed based on these considerations.