2014 (10) TMI 138 - AT - Service Tax

Adjustment of excess service tax - Whether the excess service tax paid in same months can be adjusted by the appellants in the following months - Held that - adjustment of service tax paid in excess in certain months towards the service tax liability of the subsequent months cannot be denied on such technical grounds. Indeed, in a very recent CESTAT judgment order No. 52863/2014 dated 10.07.2014 in the case of Bharat Sanchar Nigam Limited 2011 (7) TMI 946 - CESTAT, NEW DELHI the issue has been considered and decided in favour of the assessee. Thus, the issue stands settled in favour of the appellants and is no longer res-integra - Decided in favour of assessee.

Summary

Issues:
Adjustment of excess service tax paid in same months towards subsequent months' liability.

Analysis:
The judgment addresses the issue of whether excess service tax paid in the same months can be adjusted by the appellants towards their service tax liability in the following months. The Commissioner (Appeals) upheld the decision of the Adjudicating Authority, which stated that without following the procedure under Rule 6(4A) of Service Tax Rules 1994, such adjustment cannot be permitted. The Commissioner revised the Orders-in-Original under section 84 of the Finance Act 1994, imposing penalties under Section 76. The appeals were filed against these decisions. The appellants argued that various judicial pronouncements favored their position, referencing cases such as CC, Patel & Associates Pvt. Ltd. Vs. Union Of India and Nirma Architects & Valuers Vs. CCE, Ghaziabad. The Tribunal considered these cases along with recent CESTAT judgments and concluded that the adjustment of excess service tax paid in certain months towards subsequent months' liability cannot be denied on technical grounds.

The Tribunal allowed appeals related to the confirmation of demands for excess service tax paid, as the adjustment was upheld. Consequently, the penalties imposed were deemed unsustainable. Appeals regarding refunds of excess duty paid, where adjustments were not allowed but were not sanctioned, were dismissed as infructuous. The miscellaneous application seeking an extension of stay was also dismissed as infructuous in light of the disposal of the appeals. The judgment clarifies the settled position in favor of the appellants regarding the issue of adjusting excess service tax paid in certain months towards subsequent months' liability, based on relevant judicial pronouncements and recent CESTAT judgments.