2023 (1) TMI 992 - AT - Service Tax

Adjustment of excess service tax paid - succeeding month or quarter used in Rule 6(4A) of Service Tax Rules, 1994 - whether the said term means immediate succeeding month/quarter or it can be anytime even after couple of years? - whether the assessee can claim any adjustment without complying with the conditions contained in Rule 6(4B) ibid? - HELD THAT - A perusal of the aforesaid Rule 6(4A) would make it clear that the word used is succeeding month or quarter as the case may be. Succeeding month denotes the month, which succeeds the current month, i.e., the next month and dictionary meaning of succeeding means immediately following. The aforesaid clause (4A) do not uses the word any before the words succeeding month or quarter as the case may be. Rule 6(4B) provides that the adjustment shall be subject to this condition that the excess amount paid was not on account of taxability. As per the law laid down by the Hon ble Supreme Court in catena of decisions, in a taxing statute, it is the plain language of the provision that has to be preferred, where language is plain, unambiguous and is capable of determining a defined meaning. Purposive interpretation can be given only when there is an ambiguity in the statutory provision, which is not found in the present case. It cannot be said that this interpretation lead to absurdity as the procedure is prescribed in the statute itself. While interpreting the taxing statute, the importance has to be given to the clear expression used therein and no intent can be examined in case of any unambiguity in the wordings of the Notification. There is no ambiguity in the wording of Rule 6(4A) ibid. It is not that the appellant is not aware about the filing of refund claim of excess payment as the learned Commissioner has observed that in the year 2011 the appellant has applied for the refund of the excess payment made which was sanctioned by the Adjudicating Authority - thus, the filing of refund claim is not mandatory but then the adjustment under Rule 6(4A) ibid has to be done within a reasonable period if not in the immediate succeeding month or quarter. Article 265 of the Constitution of India - HELD THAT - The said Article provides that no tax shall be levied or collected except by authority of law. Here levy of tax is not disputed, what is disputed is the alleged excess payment by the Appellant in this era of self-assessment and since no documentary evidence has been placed on record except the arithmetical calculation, therefore it cannot be concluded that any extra payment of tax has been made by the Appellant. There are no infirmity in the impugned order - appeal dismissed.

Issues Involved:
1. Interpretation of the term "succeeding month or quarter" in Rule 6(4A) of the Service Tax Rules, 1994.
2. Compliance with conditions contained in Rule 6(4B) for claiming adjustments.
3. Legality of adjustments made after a significant time lapse.
4. Requirement to inform the department about excess tax payments.
5. Alleged contravention of Rule 6(1A) in the adjudicating order.
6. Applicability of Article 265 of the Constitution of India.

Detailed Analysis:

1. Interpretation of the term "succeeding month or quarter" in Rule 6(4A):
The core issue revolves around whether the term "succeeding month or quarter" means the immediate next month/quarter or can extend to any future period. The appellant argued that the term does not necessarily mean the immediate next period since the word "immediate" is not used. However, the tribunal emphasized that the plain language of the statute should be preferred. The term "succeeding" is interpreted as the next month or quarter, and the dictionary meaning supports this interpretation. The tribunal held that the adjustment should be made in the immediate following period to avoid absurdity and maintain statutory procedure.

2. Compliance with conditions contained in Rule 6(4B):
Rule 6(4B) stipulates that the adjustment of excess payment must not involve issues of law interpretation or taxability. The tribunal found that the appellant did not provide satisfactory evidence or inform the department about the excess payment, which goes against the conditions laid out in Rule 6(4B).

3. Legality of adjustments made after a significant time lapse:
The appellant adjusted the excess payment after more than two years. The tribunal noted that while the word "immediate" is not used, adjustments should be made within a reasonable period. The tribunal found a two-year delay unreasonable and held that the appellant should have applied for a refund instead.

4. Requirement to inform the department about excess tax payments:
The appellant did not inform the department about the excess payment before making the adjustment. The tribunal emphasized that informing the department and providing documentary evidence is crucial. The lack of communication and evidence from the appellant was a significant factor in the tribunal's decision.

5. Alleged contravention of Rule 6(1A) in the adjudicating order:
The appellant contended that the adjudicating order was beyond the scope of the show cause notice, which did not allege contravention of Rule 6(1A). The tribunal did not find this argument convincing and upheld the adjudicating order, emphasizing strict interpretation of the statute.

6. Applicability of Article 265 of the Constitution of India:
The appellant argued that denying the adjustment violated Article 265, which states that no tax shall be levied or collected except by authority of law. The tribunal clarified that the issue was not about the levy of tax but the procedure for adjusting excess payments. Since the appellant did not provide sufficient evidence of excess payment, Article 265 was not applicable.

Conclusion:
The tribunal dismissed the appeal, upholding the interpretation that adjustments under Rule 6(4A) should be made in the immediate succeeding month or quarter. The appellant's failure to inform the department and provide evidence, along with the unreasonable delay in adjustment, led to the dismissal. The tribunal emphasized strict adherence to the statutory language and procedures.

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