2017 (4) TMI 899 - AT - Service Tax

Adjustment of excess amount of service tax paid - Rule 6(4A) of Service Tax Rules, 1994 - denial on the ground that adjustment is possible only for succeeding month or quarter, whereas in the present case excess amount of service tax paid in the 4th quarter of financial year 2012-2013 and the adjustment of the said excess amount made in 2nd, 3rd and 4th quarter of financial year 2013-2014 - Held that - reliance placed in the case of M/s. Jubilant Organosys Ltd. Versus CCE, Meerut-II 2014 (10) TMI 138 - CESTAT NEW DELHI , where it was held that 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 - appeal allowed - decided in favor of assessee.

Issues:
Appeal against disallowance of adjustment of excess service tax paid for earlier period. Interpretation of Service Tax Rules regarding adjustment of excess amount. Applicability of CESTAT decisions in similar cases.

Analysis:

1. Disallowance of Adjustment of Excess Service Tax Paid:
The appellant, M/s Cello Houseware, appealed against Order-in-Appeal No.188/2016-17 where the adjustment of service tax paid in excess for the earlier period (2012-2013) was not allowed for the 2nd, 3rd, and 4th quarter of the financial year 2013. The Revenue contended that excess payment of service tax can only be adjusted for the subsequent month or quarter as per the Service Tax Rules. However, the appellant argued for the adjustment of the excess amount for the future period. The Tribunal examined the provisions of the Service Tax Rules, specifically Rule 6(4A), which limits the adjustment to the succeeding month or quarter. The Tribunal considered the plea of the appellant for adjustment based on the excess payment made in the previous period.

2. Interpretation of Service Tax Rules:
The Tribunal referred to the CESTAT decision in the case of Jubilant Organosys Ltd. and Dell India Pvt. Ltd., where the issue of excess payment of tax and adjustment was discussed. The Tribunal highlighted the constitutional provision under Article 265, stating that no tax shall be levied or collected except by authority of law. The Tribunal emphasized the need for a liberal interpretation of the Service Tax Rules to allow adjustment of excess service tax paid by the appellant during the relevant period. It was noted that the appellant had made adjustments in later periods based on the excess payment in the earlier period, contrary to the Revenue's argument that a refund claim should have been filed. The Tribunal considered various provisions of the Service Tax Rules and concluded that the adjustment of excess service tax paid was admissible to the appellant.

3. Applicability of CESTAT Decisions:
Based on the decisions and observations of the Tribunal in similar cases, the impugned order disallowing the adjustment was set aside, and the appeal was allowed with consequential relief to the appellant. The Tribunal emphasized the importance of considering the overall facts and submissions of both sides to arrive at a fair decision. The Tribunal highlighted the necessity of a balanced approach in interpreting the rules to ensure that excess tax payments are adjusted appropriately without unjust enrichment. The judgment underscored the significance of adhering to constitutional provisions while applying tax laws and regulations.

This detailed analysis of the judgment showcases the Tribunal's thorough examination of the issues raised by the appellant regarding the adjustment of excess service tax paid, the interpretation of the Service Tax Rules, and the application of relevant legal precedents to arrive at a just and equitable decision in favor of the appellant.

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