2017 (2) TMI 1079 - AT - Service Tax

Adjustment of excess service tax paid in advance - Rule 6(1A) applicable or not? - Held that - provisions of Rule 6(1A) intend to permit assessee to pay Service Tax in advance. It is not permitted the assessee to deem anything wrongly paid as a result of self assessment as advance. That is the reason that the provisions require that the intention of paying advance should be made clear immediately after the payment - it can be seen that the said Service Tax has not been paid as advance on his self assessment - Rule 6(1A) is not applicable to the current dispute. It is seen that benefit of Rule 6(4B) has been allowed by Commissioner (Appeals) in the impugned order. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
1. Interpretation of Rule 6(1A) regarding advance payment of Service Tax.
2. Applicability of Rule 6(4B) in the case.
3. Imposition of penalty under Section 76 of the Finance Act, 1994.

Analysis:
1. The appeal involved a dispute regarding the payment of Service Tax by M/s Star Den Media Services Pvt. Ltd. in April 2008, amounting to ?9,50,000, which was later adjusted in the subsequent return. The issue revolved around whether the appellant was entitled to the benefit of Rule 6(1A) for advance payment of Service Tax. The Tribunal noted that Rule 6(1A) allows an assessee to pay Service Tax in advance, provided certain conditions are met. However, it was observed that the amount in question was not paid as advance based on self-assessment. Therefore, the Tribunal held that Rule 6(1A) was not applicable to the current dispute, and the demand of duty was upheld.

2. The Commissioner (Appeals) had allowed the benefit of Rule 6(4B) of the Service Tax Rules, permitting an adjustment of ?1 lakh to the appellant, reducing the demand to ?8.5 lakhs. The Tribunal found no reason to interfere with this aspect of the order, indicating that the benefit of Rule 6(4B) had been correctly applied in the case.

3. Additionally, a penalty under Section 76 of the Finance Act, 1994 had been imposed on the appellant. The Tribunal considered the circumstances and invoked Section 80 of the Finance Act, 1994 to set aside the penalty under Section 76. Consequently, the appeal was partly allowed, and the cross-objection filed by the Revenue was also disposed of. The judgment was pronounced in court on 10.02.2017.