2019 (2) TMI 683 - AT - Service Tax

Adjustment of excess paid service tax against future liability - Rule 6(3) of the Service Tax Rules, 1994 - Held that - There are no merits in the contention of the learned C.A. for the appellant on going through the relevant credit note No.007/2014-15 dated 23.9.2014, invoice No.009/2013-14 dated 29.3.2014 and the agreements between the appellant the service recipient - To provide an opportunity to the appellant, the matter is remanded to the adjudicating authority so as to enable them to place all the relevant documents in support of their claim that excess service tax was paid by them during the relevant period and the adjustment was admissible to them since not against written off bad debts. Appeal allowed by way of remand.

Summary

Issues:
- Incorrect adjustment of service tax liability against Rule 6(3) of Service Tax Rules, 1994.
- Confirmation of demands with interest and penalty.
- Rejection of appeals by Commissioner (Appeals).
- Dispute regarding adjustment of excess service tax paid against future liability.
- Absence of relevant documents before the adjudicating authority.

Analysis:

1. The appellant provided credit rating services to a company under a specific agreement. The issue arose when the appellant adjusted the service tax liability incorrectly, leading to demands for recovery of the tax with interest and penalty. The Commissioner (Appeals) rejected the appeals filed against the confirmed demands.

2. The appellant's Chartered Accountant argued that during the relevant period, the recipient of service reduced the value of taxable services, resulting in an adjustment of excess service tax paid. However, due to the absence of certain documents before the authorities, the appellant's claim could not be substantiated fully.

3. The Revenue's Assistant Commissioner contended that despite evidence presented by the appellant, the demands were confirmed, emphasizing the need for supporting documents to validate the appellant's claim.

4. Upon hearing both sides and examining the records, the Member (Judicial) found merit in the appellant's argument. The dispute revolved around whether the excess service tax paid could be adjusted against future liabilities as per Rule 6(3) of the Service Tax Rules, 1994. Noting the absence of crucial documents before the adjudicating authority, the case was remanded to allow the appellant to provide all relevant evidence to support their claim.

5. The judgment allowed the appeals by remanding the matter to the adjudicating authority for a thorough review based on the additional evidence to be presented by the appellant. This decision aimed to ensure a fair assessment of whether the adjustment of excess service tax paid was admissible against future liabilities, as per the applicable rules.

This comprehensive analysis highlights the key issues, arguments presented by both parties, the decision of the Member (Judicial), and the implications of remanding the case for further review based on the availability of additional evidence.