2017 (12) TMI 30 - AT - Service Tax

Adjustment of excess service tax amount paid in discharging their liability - Rule 6(4A) and 6(4B) of Service Tax Rules, 1994 - Held that - the issue of adjustment of excess amount of service tax paid during particular period and its adjustment in subsequent quarters has been considered by this Tribunal in Plantech Consultants Pvt. Ltd. s case, 2015 (11) TMI 1356 - CESTAT MUMBAI , where it was held that amount which was paid in excess, is neither the service tax nor an amount which was payable by the appellant, therefore in any case the said amount cannot be permitted to be retained by the government, adjustment to be allowed. There is no dispute of the fact that the Appellant had paid the excess amount of service tax during the period April 2008 to March 2009 by debiting twice for the same amount of service tax liability in their books of accounts - there is no merit in the contention that not following the procedures laid down in the said Rules would debar the Appellant from adjusting the excess service tax paid, in subsequent quarters, towards their service tax liability. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Adjustment of excess service tax paid, Compliance with Rule 6(4A) & 6(4B) of Service Tax Rules, 1994, Barred by limitation, Precedent cases analysis.

Adjustment of Excess Service Tax Paid:
The case involved the Appellant discharging service tax twice for the same services rendered during specific periods, resulting in an excess payment of service tax amounting to ?23,37,505. The Appellant had included this excess amount in their ST-3 Return for a subsequent period to adjust their tax liability. The dispute arose when the authorities alleged that the Appellant did not follow the prescribed procedures under Rule 6(4A) & 6(4B) of the Service Tax Rules, 1994, for such adjustments. The Appellant argued that by including the excess amount in their return, they had complied with the necessary intimation to the Department. The Tribunal analyzed similar cases where adjustments of excess paid service tax were allowed, emphasizing that the adjustment made by the Appellant was appropriate and lawful. Consequently, the Tribunal set aside the demand raised by the Revenue, allowing the Appellant to adjust the excess service tax paid in subsequent quarters towards their tax liability.

Compliance with Rule 6(4A) & 6(4B) of Service Tax Rules, 1994:
The key contention revolved around whether the Appellant adhered to the procedures outlined in Rule 6(4A) & 6(4B) of the Service Tax Rules, 1994, for adjusting the excess service tax paid. The Appellant argued that despite not specifically intimating the Superintendent about the adjustment, declaring it in their ST-3 returns served as sufficient intimation to the Department. The Tribunal noted that while there might have been a procedural lapse, the adjustment of excess paid service tax was justified. Citing relevant provisions from the Rules, the Tribunal emphasized that the adjustment made by the Appellant was in line with the statutory provisions, allowing for such adjustments in subsequent periods. Consequently, the Tribunal held that the Appellant's actions did not warrant disallowance of the adjustment based on procedural grounds.

Barred by Limitation:
The Appellant contended that the demand notice issued by the Revenue was barred by limitation, citing the inclusion of the excess service tax amount in their ST-3 Return for a subsequent period as compliance with necessary intimation requirements. The Appellant argued that the demand notice issued in 2014 was time-barred due to the actions taken by them in adjusting the excess amount in their subsequent returns. The Tribunal, after considering the arguments and precedents, concluded that the demand notice indeed fell outside the limitation period, further supporting the Appellant's position in adjusting the excess service tax paid.

Precedent Cases Analysis:
The Tribunal referred to previous judgments, including the case of Plantech Consultants Pvt. Ltd. and Jubilant Organosys Ltd., where adjustments of excess paid service tax were allowed. By analyzing these precedents, the Tribunal highlighted that the adjustment made by the Appellant was consistent with established legal principles and previous decisions. Drawing parallels with the facts of the present case, the Tribunal found no merit in the Revenue's contention that procedural lapses would disallow the Appellant from adjusting the excess service tax paid. Ultimately, the Tribunal allowed the Appellant's appeal, setting aside the impugned order and granting consequential relief in accordance with the law.