2013 (4) TMI 459 - AT - Service Tax

GTA services - service tax demand - appellant plea of adjustment as he had deposited an excess amount of Service Tax in the month of March 2006, March 2007 and December 2007 which were to be adjusted in the months of April, 2006 to September, 2006, April, 2007 and January, 2008 respectively - the benefit of Rule 6(3) does not stand extended for the period April, 2007 onwards by referring to the provisions of Rule 6(4B)(iii) - Held that - Going through the said Rule 6(4B)(iii) which lays down that in a case other than specified under clause (ii), the excess amount paid by adjustment with monetary limit of Rs. 50,000/- for a relevant month or quarter, however, Rule 6(3), under which relief stand granted to the appellant for the previous period, continues to remain on statute. The benefit of said provisions would be available to the appellant for adjustment of excess payments as even for the subsequent period all the conditions of said Rule 6(3) stand fully specified by the appellant. As such, reference to the provisions of Rule 6(4B)(iii) was not called for. Allow the appeal with consequential relief to the appellants.

Summary

Issues:
Excess Service Tax payment adjustment under Rule 6(3) and Rule 6(4B)(iii) of Cenvat Credit Rules.

Analysis:
The appellant, engaged in sugar and molasses manufacturing, utilized goods transport agency (GTA) services, incurring Service Tax liability. Excess Service Tax payments of Rs. 1,11,902/-, Rs. 97,344/-, and Rs. 1,09,266/- were made in March 2006, March 2007, and December 2007 respectively, which were adjusted in subsequent months. A show cause notice was issued challenging these adjustments. The original adjudicating authority permitted the adjustment of Rs. 1,11,902/- under Rule 6(3) for April 2006 to September 2006. However, for subsequent periods, citing Rule 6(4B)(iii), only Rs. 50,000/- adjustment was allowed, leading to a demand for the balance amounts along with penalties and interest.

The appellant contended that Rule 6(3) allows adjustment of excess Service Tax for subsequent periods if conditions are met, including refunding the value of taxable services. The lower authorities limited the adjustment based on Rule 6(4B)(iii), which sets a monetary limit of Rs. 50,000/- for adjustments in a relevant month or quarter. The appellate authority noted that Rule 6(3) continues to be applicable, providing relief for excess payments made in previous periods. Since all conditions of Rule 6(3) were met, there was no need to invoke Rule 6(4B)(iii) for limiting adjustments.

In light of the above, the appellate tribunal set aside the lower orders, allowing the appeal and providing consequential relief to the appellants. The judgment emphasized the applicability of Rule 6(3) for adjusting excess Service Tax payments, dismissing the limitation imposed by Rule 6(4B)(iii) and ensuring compliance with the statutory provisions for relief.