2018 (5) TMI 1235 - AT - Service Tax

Short payment of service tax - adjustment between excess and short payment cannot be done denied on the ground that the procedure prescribed in this regard in the Service Tax Rules has not been complied with - Held that - It is settled position of law that substantial benefit cannot be denied for failure to comply with certain procedural conditions. In principle there can be no objection to the adjustment of Service Tax short paid and excess paid. However, the same needs to be supported by a verification of the relevant records regarding payment of Service Tax - matter remanded to the Adjudicating Authority for allowing such adjustment and finalize the matter of demand, if any - appeal allowed by way of remand.

Summary

Issues:
Appeal against Order-in-Original regarding Service Tax payment discrepancies for the period October 2006 to March 2011.

Analysis:
The appellant, engaged in coal beneficiation, filed an appeal against the Order-in-Original that confirmed a demand of &8377;12,25,27,434/- due to discrepancies in Service Tax payment. The lower authority found discrepancies in the ST-3 Returns where Service Tax was reflected as less or more than due. The appellant argued that excess payments were not considered, which could offset the short payments, potentially resulting in a refund. The Revenue contended that the prescribed procedure for adjustment was not followed. The Tribunal noted from the appellant's chart that after adjusting excess and short payments, there appeared to be an excess payment overall, indicating the demand raised was not justified.

The Tribunal highlighted that substantial benefit cannot be denied for procedural failures and acknowledged the possibility of adjusting short paid and excess Service Tax. However, they emphasized the need for verification of relevant records to support such adjustments. Consequently, the impugned order was set aside, and the matter was remanded to the Adjudicating Authority for allowing adjustments and finalizing any remaining demand. The appellant was granted the opportunity to substantiate their claim of excess payment with certified documents from their Chartered Accountant.

In conclusion, the appeal was allowed by way of remand, emphasizing the importance of proper verification and documentation in adjusting Service Tax payments to ensure fairness and accuracy in tax assessments.