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TMI Blog2015 (12) TMI 1555X X X X Extracts X X X X X X X X Extracts X X X X ..... wed – decided in favor of appellant. - ST/1140/2012-SM - Final Order No. 22132/2015 - Dated:- 1-12-2015 - Ashok K. Arya, Member (T) REPRESENTED BY : Shri L.S. Karthikeyan, Advocate, for the Appellant. Shri Ajay Saxena, Commissioner (AR), for the Respondent. [Order]. - Both the parties have been heard in detail. 2. The issue concerns with the adjustment of service tax which assessee claims they paid in excess, when the rate of taxation had been revised from 12.36% to 10.3% on 24-2-2009, whereas they continued to charge from their customers and paid to the exchequer service tax at the earlier rate of 12.36% during the period of April 2009 to August 2009, though the service tax returns for the 6 month period from April 2009 to September 2009 were filed factually on 6-month basis. The appellant subsequently adjusted this excess payment during the later payments of service tax. However in respect of the above adjustment, Revenue states that the appellant was not entitled to make this adjustment on their own, thus this adjustment which Department quantified as ₹ 6,15,083/- treated it as short payment of service tax and issued the show-cause notice for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igarh - 2014 (36) S.T.R. 1084 (Tri. Del.) wherein adjustment of excess payment of service tax was allowed. 3.3 Learned advocate vehemently argues that State cannot charge or retain what is not due to the exchequer and procedural formalities cannot come in the way of adjustment of this amount, which was paid in excess over and above the rate of taxation as prevalent during the relevant period. He also cites the decision of Hon ble High Court of Karnataka in the case of CCE, Mangalore-3 v. Solaris Chemtech Ltd. - 2011 (273) E.L.T. 191 (Ker.) saying that adjustment of payment of service tax was applicable and they were entitled to the amount paid in excess to the exchequer. 4. Learned AR, Shri Ajay Saxena appearing for the Revenue argues that the appellant is not at all entitled to the suo motu adjustment of excess payment of service tax as they are neither strictly covered under Rule 6(3) of the Service Tax Rules (STR) 1994 nor under Rule 6(1A) of the Service Tax Rules, 1994. 4.1 The learned AR for the Revenue points out that the provisions of Rule 6(3) of S.T.R., 1994 talks about the services which were not so provided by an assessee and in this case services were v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it as per the provisions of law of Service Tax. 6. After careful consideration of the facts on record and the circumstances cited by the appellant, when the assessee paid excess amount of tax to the exchequer, law of the land is very clear under Article 265 of the Constitution of India, which says that No tax shall be levied or collected except by authority of law. If Revenue becomes very rigid on strict compliance of the procedure every time and all the time, there could be situations where such rigidness and strictness on the part of the Revenue could become contrary to the provisions of the Article 265 of the Constitution of India. 6.1 Strictly speaking, one can be in general agreement with the pleadings of the learned AR appearing for the Revenue that the present appellant is not strictly covered under those different Rules of S.T.R., 1994 i.e. Rule 6(3), Rule 6(4A), Rule 6(4B) and Rule 6(1A) of the Service Tax Rules, 1994. But when one sees the combined effect of the provisions of S.T.R., 1994 just quoted above, the implications are that the present appellant has to be given the benefit of adjustment of excess service tax paid by them during the relevant period i.e. Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the amount of service tax paid on the estimation basis is found to be in excess of his actual tax liability. In fact, in such a situation the excess amount paid by him is like advance payment of service tax during the month in excess of the actual service tax liability and which can always be adjusted against his service tax liability for other months as there is no unjust enrichment angle involved. For example, if against actual payments of ₹ 4 crore received by an assessee in a particular month against services provided, on which his service liability @ 10% adv. is ₹ 40 lakhs, he has paid tax of ₹ 50 lakhs on the basis of his estimated receipt of rupees five crores during the month, the excess tax payment of ₹ 10 lakh paid is like an advance payment of tax whose incidence has not been passed on to his customers. In fact, w.e.f. 1-3-2008, sub-rule (1A) of Rule 6 has been introduced by Notification No. 4/2008-S.T., dated 1-3-2008 which also provides that without prejudice to the provisions of sub-rule (1) of Rule 6, every person liable to pay service tax may, on his own, pay an amount as service tax in advance to the credit of Central Government and adju ..... X X X X Extracts X X X X X X X X Extracts X X X X
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