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TMI Blog2004 (8) TMI 604X X X X Extracts X X X X X X X X Extracts X X X X ..... nutshell, the impugned order of the Deputy Commissioner admits that tax collected and tax payable have been declared by the Appellants in their returns. If so, no further documents were required for raising of any demand when tax provisionally paid was also known. If tax payable and tax provisionally paid were known during the relevant time, tax collected was not required to be looked into and the notice and order do not dispute the amount of tax payable and tax provisionally paid as per the returns submitted. Therefore, demanding the differential tax on the basis of tax collected except for one month, i.e., April 1996 for the year, 1996-97 without any sanction of law during the relevant period when the tax payable is less than tax provisionally paid is not tenable in law. For the year, 1996-97, there had been excess payment of Service Tax of Rs. 2,93,199/- and for the years 1994-95 to 1999-2000 excess payment is to the extent of Rs. 26,10,924/-. According to the Appellant, there is excess payment of Rs. 26,10,928/- and according to the Revenue, there is short payment of Rs. 29,13,070/-. I take up the Appeals for analysis, discussion and orders. Appeal No. 35/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the service tax paid as per the provisional return and excess/short payments of service tax is determined and the net short payment, according to the department is Rs. 29,73,070/-. (c) An amount of Rs. 84,97,244/- was sought to be demanded as interest under Sec. 75 of the Act read with Rule 6 of the Rules on the short payment of service tax upto 30-4-2000. (d) An interest of Rs. 9,18,536/- was also demanded on the ground of belated payment of service tax for the month of March 1995. According to the department as against the due on 15-4-1995 the appellants have remitted the tax on 17-4-1995. The appellants replied to the said show cause notice on 29-5-2002 and also filed written statement on 26-7-2002. The appellants appeared for personal hearing on 18-7-2002 and 3-10-2002 and again on 5-3-2003. Vide order in original No. 51/2003-2004 dated 30-1-2004 the Lower Authority confirmed the service tax and interest amounts as alleged in the show cause notice on the following grounds. (i) in view of Rule 6(1) of the Service Tax Rules, 1994, the Department is justified in collecting the higher amount between tax collected and tax payable as declared in the Returns. (i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of law. (c) The Appellants also produced yearwise statements on the tax paid and the tax payable and the difference in tax. This statement confirms that for disputed period 1994-95 to 1999-2000 the taxes paid is Rs. 523,15,19,121/- and the tax payable is Rs. 522,89,08,193/- and in the process there has been excess payment of Rs. 26,10,928/-. (d) The Appellants submit that the methodology adopted by the revenue and the appellants appear to be one and the same viz. the excess or shortage gets adjusted during the subsequent months of the same financial year and both revenue and the appellants have recognized and resorted to this adjustment. The only difference being style in doing the adjustment - Revenue has taken the tax collected amount from the customers as the basis and had adjusted the sum against tax provisionally paid whereas the assessee has taken the tax actually payable under the law and had adjusted the same against tax provisionally paid. Consequently according to the Appellant there is excess payment of Rs. 26,10,928/- and according to the Revenue there is a short payment of Rs. 29,73,070/-. (vi) The short point for consideration is whether on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excess to the credit to the Central Government. The expression employed is collected any amount in excess of the duty assessed or determined . The term duty assessed or determined is used vis-a-vis the term duty collected and hence it is clear that the duty assessed or determined cannot mean that duty collected from the buyer. Applying this scenario to Rule 9B(5) the duty provisionally assessed shall be adjusted against the duty finally assessed would only mean that difference arising out of the tax provisionally paid and the tax finally payable and not the tax as collected from the buyers. (d) In view of the fact that Rule 9B is made applicable for provisional assessment under Rule 6(4) of the Service Tax Rules, 1994, the order of the lower authority confirming the service tax by taking the tax collected amount and adjusting the same to the tax provisionally paid is not correct in law. (e) The issue also needs to be examined from one more angle. Section 83 of the Finance Act, 1944 extends the applicability of certain provisions of the Central Excise Act, 1944 to the service tax legislation. For the first time by the Finance Act, 2003 (Act 32 of 2003) Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here has been a finality to the assessment and the quantum of tax actually payable to the revenue is decided. Rule 6(4) of the Service Tax Rules is a self-contained code contemplating provisional assessment. If one were to hold the view that Sec. 75 would supersede Rule 6(4) then Rule 6(4) would be rendered otiose or redundant and every case of interest would then fall under Sec. 75 of the Finance Act, 1994. This cannot be correct. Rule 6(4) of the Service Tax Rules, 1994 is a self-contained code and it relates to provisional assessment. It refers to the applicability of the erstwhile Central Excise Rules, 1944 and after incorporation of new Central Excise Rules, 2001 the applicability of the said rules. Prior to incorporation of new Central Excise Rules, 2001, provisional assessment would be carried out only as per Rule 9B of Central Excise Rules, 1944 which provision did not contain any mechanism to charge interest on finalisation of assessment. This mechanism was introduced for the first time under Rule 7 of the Central Excise Rules. Rule 7(4) mandates an assessee to pay interest on any amount payable to the Central Government consequent to final assessment. Sub-rule 3 as specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RBI cheque No. 454183 dated 15-4-1995 and the bank by their letter dt. 24-4-1995 clarified that the cheque was presented on 15-4-1995 and had informed that 15-4-1995 originally happened to be a full day business but subsequently changed as half a day working and therefore the related central excise challan could be released only on 17-4-1995 after realization. The appellants also rely on the clarification issued by the Directorate of Service Tax in F. No. V. DG ST/30 Misc.-46/2000 dated 23-8-2000 wherein it has been clarified that in cases where the service tax amount has been deposited by the assessee in an authorized bank by cheque before the due date and such cheque is not dishonoured later, the Department need not initiate proceedings for recovery of interest/penalty etc. and consequently no interest is payable. The appellants also rely on the decision of the Hon ble Tribunal in the case of Eicher Consultancy Services Ltd. v. Commissioner of Central Excise, Mumbai 2003 (157) E.L.T. 432 (Tri.) = 2003 (58) RLT 231 wherein the revenue has conceded the position in favour of the assessee. In view of the clarification dated 23-8-2000 and the subsequent amendment of the provision in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment is only prospective in nature and interest clause would apply one and only for provisional assessment ordered on or after 1-7-2001. 12. It is very clear from the impugned orders that the orders for provisional assessment have been made on 24-7-1996 and it is against those orders of provisional assessment final assessment order has been passed. Now the final assessment orders have been issued pursuant to the above provisional assessment orders. Having conceded the fact that the order of provisional assessment was passed on 24-7-1996 it is but clear that interest clause relating to provisional assessment would not apply to these cases since they would apply only for such provisional assessments ordered on or after 1-7-2001 irrespective of the date of finalisation of the provisional assessment. Since Rule 6(4) of Service Tax Rules, 1994 has given way to new Central Excise Rules, 2001 for ordering provisional assessment and finalizing the same, the instructions issued by the CBEC with regard to provisional assessment under new Central Excise Rules would mutatis mutandis apply for such assessments made under Rule 6(4) of the Service Tax Rules, 1994. 13. In view of the above d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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