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TMI Blog2023 (6) TMI 371X X X X Extracts X X X X X X X X Extracts X X X X ..... f Rs. 1,87,93,063/- paid by the appellant on 4.11.2010/31.03.2011 was always remained with the Revenue till its adjustment made in Jan, 2011. It is also not disputed that the advance comprised only 5% of the project value of Rs. 1610.01 crore out of which 445 Crore (130+415) comprised of the service portion as per agreement between the appellant and VISA. This final value of service portion is also not disputed. Final taxable invoices for advance against the service portion were issued on 05.01.2012 involving service tax of Rs. 2,29,18,015/- on a taxable value of Rs. 22.25 Crore of which Rs. 1,87,93,063/- was suo-moto adjusted on the ground that the tax was erroneously paid in the past which was not required to be paid as same does not pertain to the taxable value of service - It is not disputed in the impugned order that the total advance received by the appellant was not 22.25 crore. Thus, there was in reality no short payment by the appellant. We further find that the findings of the Ld. Commissioner, that the appellant could not have adjusted the excess tax paid on 4.11.2010/31.03.2011 beyond the month of Nov 2010/April 2011 is also not sustainable. The demand of Rs. 1,87,93 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llants re-estimated that service portion constitutes only at 25% of the total contract value of Rs. 1610.01 Crore. The Appellants re-calculated the Service Tax liability considering 25% of the entire advance amount which came to Rs. 20.125 Crores (inclusive of service tax) to be attributable towards 'Service Portion'. The service tax worked out to be Rs. 1,87,93,065/- on this value of Rs.20.125 crore. After They paid the balance Service Tax of Rs. 22, 10,065/- after adjusting tax paid of Rs. 1,65,83,000/-vide challan dated 31.03.2011. Though there was no initial work sheet or detail plan towards different components of the work contract in the letter of award but finally the total contract of Rs. 1610.01 crore was divided into following components by entering into different contracts dated 7.12.2011 by M/s. VISA with the appellant: 1. Towards supply of Plant Equipment: 2. For installation, commissioning, testing etc.: 3. For civil structural and Architectural work: 4. For supply of civil input materials like cement steel etc. Rs. 515 crore. Now, as the value of services towards service portion which was contained in contracts at Sr. No. 2 3 of Rs. 130 Cro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as in terms of the said Rule, any adjustment if it is made had to be made in the succeeding month or quarter as the case may be thus such adjustment could be made in the month of Nov. 2010 and April 2011 and the adjustment made in Jan 2012 was out of the purview of the realms of Rule 4A, and hence unacceptable. Therefore, no adjustment was permitted to be made for the same. The appellant is in appeal before us against the confirmation of demand of Rs. 1,87,93,063/. 3. During the course of hearing Ld. Counsel appearing on behalf of the appellant has assailed the impugned order on various alternative grounds and following arguments have been advanced:- (i) that as far as the liability of service tax is concerned, the taxable event is actual rendition of service. It is not receipt of payment which is the taxable event. In the absence of Point of Taxation Rules, 2011, there is no deeming fiction for rendition of service and thus, the receipt of advance cannot be considered as taxable event. In support of the above submissions, he relied upon the judgment in the case of Vistar Construction P Ltd. vs. Union of India Ors., 2013 (2) T MI 52-Delhi High Court, wherein it was observe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax paid during the month can be adjusted against his tax liability during other months and in this regard, there cannot be any monetary limit. the Appellants submits that the adjustment of excess tax paid by it towards the tax liability arising in subsequent months in terms of Rule 6(4A) of the Service Tax Rules has been rightly carried out and, on this ground, alone the impugned order to the extent it denies the adjustment of service tax as carried out by the Appellants becomes liable to be set aside. (vi) The Appellant submits that in terms of Rule 6(3) of Service Tax Rules, 1994 in case where assessee issues an invoices and receives payment as against the services to be provided and duly discharges the service tax on such advance received, however such services could not be provided for any reason, the assessee in such case may take credit of such excess service tax paid, provided the condition mentioned therein are satisfied. The Appellant submits that in the present case as well, where the Appellant had raised invoices and received advance from M/s. VISA against services to be provided, however later on the contract between the parties was terminated and the performance ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he advance comprised only 5% of the project value of Rs. 1610.01 crore out of which 445 Crore (130+415) comprised of the service portion as per agreement between the appellant and VISA. This final value of service portion is also not disputed. Final taxable invoices for advance against the service portion were issued on 05.01.2012 involving service tax of Rs. 2,29,18,015/- on a taxable value of Rs. 22.25 Crore of which Rs. 1,87,93,063/- was suo-moto adjusted on the ground that the tax was erroneously paid in the past which was not required to be paid as same does not pertain to the taxable value of service. We find that in the present case, the appellant has claimed to have annulled the earlier taxable value on the ground that the value (Rs. 20.125 Crore inclusive of tax) was not taxable being finally appropriated towards cost of materials and therefore utilized the tax already paid on that value for payment of finally determined taxable value of Rs. 22.25 Crore. The revenue has claimed that the appellant could not have annulled the earlier taxable value of Rs. 20.125 crore as the same was correctly apportioned for service portion and tax duly discharged. We find that even if the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case where the assessee for any reason is unable to correctly estimate on the date of deposit, the actual amount payable for a particular month or a quarter, as the case may be, and according to this rule, he may request the jurisdictional Asstt./Dy. Commissioner for payment of service tax on provisional basis. Sub-rule (4A) provides that notwithstanding anything contained in sub-rule (4), where the assessee has paid to the credit of Central Government any amount in excess of the amount liable to be paid towards the service tax liability in the month/quarter as the case may be, the assessee may adjust such excess amount paid by him against his service tax liability in subsequent month/quarter and sub-rule (48) lays down the conditions for such adjustment. The main condition is that the excess payment is not on account of any reasons involving interpretation of law, taxability, classification, valuation or applicability of any exemption notification. The other conditions are that an assessee with centralized registration under Rule 4(2) can adjust excess payment in one month against this tax liability in other months without any limit, for other assessee, there is a monetary limit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der sub-rule (1A) of Rule 6. There is no condition in Rule 6(4A) read with Rule 6(4B) providing that for availing of the adjustment facility, the assessee must have opted for centralized registration under Rule 4(2). Moreover, when an assessee during certain months, for reasons other than interpretation of law, taxability. classification, valuation or applicability of exemption, has paid service tax in excess of his actual tax liability, the Government cannot retain the excess tax paid by the assessee by refusing its adjustment against his tax liability during other months and refusing adjustment of such excess tax payment during a month against tax liability during other months and appropriation and retention of the same would amount to collection of tax without the authority of law which is contrary for the provisions of Art. 265 of the Constitution of India. As held by the Apex Court in case of Ispat Industries Ltd. v. CC, Mumbai reported in 2006 (202) ELT. 561 (S.C.) (paras 26 to 29) whenever there is conflict between a norm in a higher layer in the hierarchy of the laws in the legal system of the country and a norm in a lower layer in the hierarchy, the norm in the higher laye ..... 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