2017 (12) TMI 1029 - AT - Service Tax

Ineligible availment of advance tax deposited - Rule 6(1A) of the Service Tax Rules, 1994 - Revenue s case is that assessee had not produced the original documents evidencing payment of service tax for the services rendered by them for the period in question. Held that - intimation of such adjustment was with the Department and at the most it was only a procedural lapse and on account of procedural lapse excess payment made by the assessee cannot be retained by the Government and therefore the action of the Revenue was held to be not sustainable - Moreover the respondent-assessee is a PSU and there is no mala fide intention on the part of the assessee - appeal dismissed - decided against Revenue.

Summary

Issues:
Appeal against Order-in-Original upholding ineligible service tax demands due to procedural lapse.

Analysis:
The appeal was filed by the Revenue challenging the Order-in-Original passed by the Commissioner(Appeals) upholding the demands of service tax on ineligible availment of advance tax by the respondent. The respondent had failed to intimate the department as required by Rule 6(1A) of the Service Tax Rules, 1994. The Order-in-Original dropped the demands citing duplication of payment and unintentional procedural lapse. The Department contended that the excess payment made by the assessee did not comply with the formalities for advance tax payment as per the rules. They also alleged suppression of facts by the assessee to evade tax payment.

On appeal, the Commissioner(Appeals) rejected the Revenue's appeal, stating that the adjustment of excess payment was declared in the ST3 return, and thus, the department was informed indirectly. The Commissioner held that the procedural lapse did not justify the retention of excess payment by the government. The Revenue argued that both lower authorities favored the assessee based on procedural lapses, without considering the legal aspects.

After hearing both sides, the Tribunal found no infirmity in the impugned order. It noted that the respondent was a PSU and there was no malicious intent on their part. Consequently, the Tribunal upheld the impugned order, dismissing the appeal of the Revenue. The judgment was pronounced in open court on 27/10/2017.