2014 (5) TMI 578 - AT - Service Tax

Adjustment of excess service tax - Whether the appellant could adjust the excess service tax paid during April 2006 to September, 2006 against its service tax liability for the month of October, 2006 in terms of provisions of Rule 6 (3) of the Service Tax Rules, 1994 - Held that - reason for excess payment of service tax was mistake in computing service tax liability for the period April 2006 to September 2006, which is not disputed by the Revenue. There is no evidence on record that the appellant had received/ retained any amount in excess of the value declared by it in its Half Yearly Return for the period ending 30.09.2006. Therefore, in this case the question of refunding the value of taxable service and service tax thereon to any person (service recipient) did not arise. Appellant could not produce any documentary evidence to show that the value of taxable service and service tax thereon had been refunded to any recipient of its taxable service inasmuch as the excess paid service tax did not correspond to any service provided or agreed to be provided by the appellant to any service recipient. First appellant authority has observed that appellant had not produced evidence related to the occurrences of said excess payments before the lower authorities otherwise the issue could have been looked into the entirely of prevailing Rule 6(3) of the Service Tax Rules 1994. The matter is, therefore, required to be remanded to the Adjudicating Authority. Appellant is also directed to produce all the relevant documents shown excess payment and to satisfy that it conforms to the provision of Rule 6(3). - Decided in favour of assessee.

Summary

Issues:
- Whether the appellant could adjust the excess service tax paid during April 2006 to September 2006 against its service tax liability for October 2006 under Rule 6(3) of the Service Tax Rules, 1994.

Analysis:
The appellant argued that due to a calculation mistake, they had overpaid service tax for April to September 2006, leading to an excess payment. They contended that this excess amount was correctly adjusted against their service tax liability for October 2006 as per Rule 6(3) of the Service Tax Rules, 1994. The appellant cited relevant case laws to support their position.

On the other hand, the Revenue argued that the appellant did not meet the conditions of Rule 6(3) as they failed to provide evidence of refunding the excess amount to the service recipient. The Revenue relied on a specific case law to support their stance and confirmed a service tax demand for October 2006 to March 2007 along with interest and penalty.

After hearing both sides, the Tribunal examined the issue at hand. The Tribunal noted that the reason for the excess payment was a mistake in computing the service tax liability, which was undisputed. However, there was no evidence that the appellant had retained any excess amount or refunded it to the service recipient. The Tribunal observed that the appellant failed to provide documentary evidence of refunding the excess amount as required by Rule 6(3). Due to this lack of evidence, the matter was remanded to the Adjudicating Authority for further examination.

Ultimately, the Tribunal allowed the appeal by remanding the case to the Adjudicating Authority for a fresh decision. The appellant was directed to produce all relevant documents related to the excess payment to ensure compliance with Rule 6(3) of the Service Tax Rules, 1994. The Adjudicating Authority was instructed to provide the appellant with an opportunity for a personal hearing during the denovo proceeding.