2019 (11) TMI 561 - AT - Service Tax

Demand of service tax - works contract service - reverse charge mechanism - demand of interest and penalty - HELD THAT - The revenue could not establish the said service as works contract service throughout the proceedings - the demand as also interest and penalty set aside related to confirmation of service tax on works contract service under reverse charge mechanism from the appellant who is service receiver. The document produced before the Original Authority established that the said service was repair and maintenance service . The issue is no more res-integra and stands settled by this Tribunal s decision in the case of SIEMENS LTD. VERSUS COMMISSIONER OF CENTRAL EXCISE, PONDICHERRY 2013 (2) TMI 609 - CESTAT CHENNAI wherein it was held that if the adjustment of excess paid amount is denied then there will be twice payment of service tax for the same service. relying on the earlier decision of this Tribunal, the demand of ₹ 29,631/- along with interest and penalty is not sustainable. The issue of payment of interest of ₹ 247/- which has not been pressed by the appellant. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Confirmation of demand of interest and penalty of service tax as 'works contract service'.
2. Adjustment of excess paid service tax and objection by revenue.
3. Payment of interest not pressed by the appellant.

Analysis:

Issue 1:
The first issue in dispute pertains to the confirmation of demand of interest and penalty of service tax as 'works contract service'. The Tribunal noted that the revenue failed to establish the service as 'works contract service' throughout the proceedings. Upon reviewing the documents, it was established that the service in question was actually 'repair and maintenance service'. Consequently, the demand, interest, and penalty related to the confirmation of service tax on 'works contract service' under reverse charge mechanism were set aside in favor of the appellant.

Issue 2:
The second issue involves the adjustment of excess paid service tax by the appellant, which was objected to by the revenue. The revenue contended that the adjustment should not have been implemented in the subsequent month or quarter, as per the Service Tax Rules, 1994. However, the Tribunal referred to a previous decision in the case of M/s Siemens Ltd. Vs Commissioner of Central Excise, Pondicherry, where it was held that denying the adjustment of excess paid amount would result in double payment of service tax for the same service. Relying on this precedent, the Tribunal ruled in favor of the appellant, stating that the demand of the excess paid amount, along with interest and penalty, was not sustainable.

Issue 3:
Lastly, there was an additional issue concerning the payment of interest amounting to ?247, which the appellant did not press. As a result, this issue was not pursued further during the proceedings.

In conclusion, the impugned order was modified, and the appeal was allowed in favor of the appellant. The Tribunal directed that the appellant shall be entitled to consequential relief as per the law.