2018 (12) TMI 1480 - AT - Service Tax

Recovery of the amount of service tax adjusted along with interest and penalty - Non-compliance with the conditions prescribed under Rule 6 (3) and Rule 6(4B) of Service Tax Rules, 1994 - Held that - Undisputedly the appellant has adjusted the excess amount of service tax paid during the relevant period April 2010 to March 2011 in accordance with Rule 6(3) of the Service Tax Rules 1994. For the subsequent period this Tribunal has allowed to adjust excess amount of service tax paid by the appellant in similar facts and circumstances. However, in the present case to ascertain whether the amount collected in excess has been refunded on to the customer by way of credit note or otherwise matter is remanded to the adjudicating authority. Appeal allowed by way of remand.

Issues:
1. Adjustment of excess service tax paid by the appellant.
2. Applicability of Rule 6(3) of Service Tax Rules, 1994.
3. Challenge to penalty imposed under Section 76 of Finance Act, 1994.
4. Verification of credit notes issued by the appellant.
5. Request for remand to the adjudicating authority.

Analysis:
1. The appeals were filed by both the Revenue and the assessee against the same Order-in-Original passed by the Commissioner of Central Excise, Raigad. The appellant, engaged in providing port services, adjusted an amount of excess service tax paid during the relevant period. The Revenue challenged the penalty imposed under Section 76 of the Finance Act, 1994. The main contention was regarding the adjustment of excess service tax paid by the appellant.

2. The appellant argued that they adjusted the excess service tax paid in accordance with Rule 6(3) of the Service Tax Rules, 1994. They claimed that the excess amount was paid initially on services not provided or where excess value was charged, and later adjusted against their liability. The appellant cited previous judgments supporting their interpretation of Rule 6(3) and emphasized that they had refunded the excess amount to customers through credit notes.

3. The Revenue contended that the credit notes issued were for billing and accounting settlement purposes, not related to services not provided or excess value charged. The adjudication process involved a report from the field formation, which the appellant claimed they did not receive, hampering their ability to respond effectively.

4. After hearing both sides and reviewing the records, the Tribunal found that the appellant had indeed adjusted the excess service tax paid as per Rule 6(3). However, due to the lack of access to the report from the Dy. Commissioner, the Tribunal remanded the matter to the adjudicating authority for further substantiation. The appellant was granted the opportunity to respond to the report, and the authority was directed to consider the Tribunal's previous order in a similar case.

5. The Tribunal allowed the appeals by remanding the matter to the adjudicating authority for a detailed examination of whether the excess amount collected had been refunded to customers through credit notes. The appellant's argument regarding the adjustment of excess service tax paid was upheld, pending further clarification and examination by the adjudicating authority.

This detailed analysis of the judgment covers the issues raised, the arguments presented by both parties, and the Tribunal's decision to remand the matter for further clarification and examination.

← Previous Next →