TMI Blog2023 (1) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... As held by the Member (Judicial) that adjustment of advance tax paid has to be allowed in the subsequent period under Rule 6(1A) and the disclosure of tax paid in ST-3 Return, amounts to compliance of the condition in Rule 6(1A) proviso. OR The payment in this case is excess payment of tax and thus, falls under the provisions of Rule 6(4A) and the same cannot be adjusted for failure to comply with the requirements of Rule 6(4B), as held by Member (Technical). Q.3. Whether as held by the Member (Judicial) that the Adjudicating Authority have wrongly applied Rule 6(4A)/6(4B) of the Service Tax Rules, which is applicable in case of provisional assessment and the applicable Rule in the facts of the case is Rule 6(1A)? OR As held by the Member (Technical), Rule 6(1A) (advance payment of tax), Rule 6(4) (provisional assessment of tax) and Rule 6(4A) (excess payment of tax) are different and the applicable Rule is Rule 6(4A) read with Rule 6(4B). Q.4. The Hon ble High Court have remanded the matter to the Tribunal to examine the entitlement of adjustment of tax, as prayed by the Revenue, and the same is not confined to the entitlement under the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h, 2011, service tax was chargeable under Section 68(2) of the Finance Act, 1994 on receipt basis (cash basis). The appellant was also doing the work of transportation for the same service receiver of coal, from the mine/ dump to the power plant of the service receiver. It was a condition in the contract that service tax shall be paid separately by the receiver of service. It was further stipulated that the service receiver shall pay the amount of service tax only on the production of evidence of payment/ challan by the appellant. Thus, the appellant immediately on raising of the invoice for the services rendered, used to deposit the service tax in advance and annexed the evidence of payment with the invoice, so as to receive the payment for services rendered including the service tax. The appellant booked the service rendered and tax thereon in the return for the subsequent months, when they received the payment. However, due to some clerical error in filling of the ST-3 form, the appellant committed error in properly reflecting the service tax brought forward, which was paid in advance in the previous period, and thereafter showing the adjustment in the period for which the re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elevant provisions and has given a finding on the basis of a chart, which did not form part of the proceedings before the adjudicating authority. The Hon ble High Court framed the following substantial question of law:- 1. Whether the Tribunal was justified in law in remanding the case to the adjudicating Authority for working out the amount of adjustment claimed by the assessee without recording any finding of assessee s entitlement to adjustment in terms of provisions contained under Rule 6(4)(A) and (4)B of the Service Tax Rules, 1994? This question has been answered in favour of the Revenue in the ex-parte order of the Hon ble High Court. 5. Learned Counsel Sh. M. P. Devnath, appearing for the appellant urges that the Impugned Order has confirmed demand of Service tax along with interest and penalty, without appreciating the submissions made by the Appellant. That the conditions required to be fulfilled for availing the adjustment of excess tax in subsequent months is procedural in nature, and failure to comply with the same is required to be condoned in the interest of justice. The synopsis of the submissions of the Appellant are as follows. 6. At the outset, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of excess tax under section 6(4A) of Service tax Rules on the ground, prescribed procedure has not been followed. Following the series of decisions settling the issue in favour of the Assessees, the Tribunal allowed adjustment of excess tax. 8.1. Further reliance is placed on the following decisions: - Gujarat NRE Coke Ltd. Vs. CCE 2012 (6) TMI 581- CESTAT Ahmedabad; BSNL vs. CCE 2019 (3) TMI 1754 CESTAT Kolkata; Larsen Toubro Ltd. vs. CST 2017 (7) TMI 171 CESTAT Mumbai . General Manager vs. CCE 2014 (8) TMI 589- CESTAT Delhi. 9. That in view of the above settled legal position, the Impugned Order is liable to be set aside on this ground alone. 10. It is further submitted that the Appellant had deposited Service tax in advance during the relevant period as certain customers reimbursed tax component of the invoice only after the Appellant furnished evidence of deposit of Service tax. That said facts were explained time and again to the Department, right from the time of audit. However, in complete disregard of the same, the Department has taken a position that adjustment of excess or advance tax cannot be permitted due to failure in compliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the Deputy Commissioner of Central Excise, as the case may be, on receipt of such request, may allow payment of service tax on provisional basis on such value of taxable service as may be specified by him and the provisions of the Central Excise Rules, 2002, relating to provisional assessment, except so far as they relate to execution of bond, shall, so far as may be, apply to such assessment. (4A) Notwithstanding anything contained in sub-rule (4), where an assessee has paid to the credit of Central Government any amount in excess of the amount required to be paid towards service tax liability for a month or quarter, as the case may be, the assessee may adjust such excess amount paid by him against his service tax liability for the succeeding month or quarter, as the case may be . (4B) The adjustment of excess amount paid, under sub-rule (4A), shall be subject to the following conditions, namely: (i) excess amount paid is on account of reasons not involving interpretation of law, taxability, classification, valuation or applicability of any exemption notification; (ii) excess amount paid by an assessee registered under sub-rule (2) of rule 4 on account of delayed re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard is placed on the decisions in the case of Laxmipat Singhania vs. CIT, U.P. 1969 (72) ITR 291; Mahaveer Kumar Jain vs. CIT, Jaipur [2018] 404 ITR 738 (SC). 18. It is further submitted that extended period is not invokable and penalty is not leviable in the instant case as the Impugned Order has not found any evidence of suppression, positive act of evasion etc. at the end of the Appellant. In any case, when excess tax stands deposited by the Appellant, which is clearly evident from the ST-3 returns filed by the Appellant, the Impugned Order is completely incorrect in law in applying the extended period of limitation and the penalty provisions against the Appellant. Reliance is placed on the decision given in the matters of Tamil Nadu Housing Board vs. CCE 1994 (74) ELT 9 (SC), CCE vs. Chempar Drugs Liniments 1989 (40) ELT 276 (SC), CCE vs. HMM limited 1995 (76) ELT 497(SC). 19. Accordingly, prays for allowing the appeal with consequential benefits. 20. Learned Authorised Representative Sh. Ravi Kapoor for the Revenue relies on the impugned order. He further states that the appellant have failed to properly disclose the figures of advance tax and carried for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 29,947/- -- -- 38,29,947/- November, 2006 47,37,486/- 1,74,57,238/- 1,27,19,752/- -- December, 2006 73,61,932/- 46,59,251/- -- 27,02,681/- January, 2007 73,55,844/- 51,42,197/- -- 22,13,647/- February, 2007 36,78,608/- 58,36,931/- 21,58,323/- -- March, 2007 42,54,521/- 60,64,011/- 18,09,490/- -- Total 1,66,87,565/- 87,46,275/- Period April, 2007 to March, 2008 Month ST payable as per ST-3 ST paid Excess payment Short payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -- April, 2009 to March, 2010 23,96,208/- -- April, 2010 to March, 2011 -- 1,67,13,111/- Total 4,52,37,583/- 2,75,11,343/- Net excess payment Rs.1,77,26,240/- 24. Thus, the appellant have paid excess /advance tax of Rs.1,77,26,240/-, which is unadjusted or refundable. This fact is admitted by the Adjudicating Authority in para 10.3(ii) of the impugned order, wherein the learned Commissioner has observed as follows:- (ii) Noticee (appellant) had made excess payment of service tax against their service tax liability. I find that again there is no remark in the ST-3 returns filed for the aforesaid period, as regards the excess payment of service tax. Though the noticee have not disclosed anything about the short / excess payment of service tax in their ST-3 returns, but considering that they intend to adjust the excess payment towards their service tax liability of the subsequent month or when paid short, it is to be seen as to whether they have followed the provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be retained by Revenue in any circumstances. 27. As regards the ground of limitation taken by the appellant, we find that admittedly there is no case of any escaped turnover or failure on the part of the appellant to disclose their taxable turnover. Admittedly, in the facts of the present case, there is only failure to disclose the advance tax properly and also to give intimation to the Range Superintendent upon payment of advance tax. Thus, we hold that no case of suppression of material facts or fraud etc. is made out. Thus, we hold that extended period of limitation is not invocable in the facts of the present case. 28. In view of aforementioned observations and findings, we set aside the impugned order and allow the appeal. We further direct the Adjudicating Authority to grant the adjustment of advance/ excess paid tax from month to month for the whole period of dispute. If any tax or advance tax is found paid in excess after adjustment of the tax payable, the appellant shall be entitled to refund of such tax alongwith interest, as per Rules. 29. In the result, the appeal is allowed with consequential benefits. (Anil Choudhary) Member (Judicial) (P. V. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment by the 6th day of the month if the duty is deposited electronically through internet banking, or, in any other case, the 5th day of the month, as the case may be, immediately following the quarter in which the service is deemed to be provided as per the rules framed in this regard. ------- (1A) Without prejudice to the provisions contained in sub-rule (1), every person liable to pay service tax, may, on his own volition, pay an amount as service tax in advance, to the credit of the Central Government and adjust the amount so paid against the service tax which he is liable to pay for the subsequent period: Provided that the assessee shall,- (i) intimate the details of the amount of service tax paid in advance, to the jurisdictional Superintendent of Central Excise within a period of fifteen days from the date of such payment; and (ii) indicate the details of the advance payment made, and its adjustment, if any in the subsequent return to be filed under section 70 of the Act. ------ (4) Where an assessee is, for any reason, unable to correctly estimate, on the date of deposit, the actual amount payable for any particular month or qu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s with excess payment of tax and 6(4B) lists the conditions for 6(4A) . Advance payment of tax , payment of tax on provisional assessment and excess payment of tax are distinct and different under the Rules and separate conditions and procedures have been laid down for each and hence they must be treated so. The differences are as follows: Rule Type of payment of tax Conditions Type of adjustment 6(1) Normal payment - - 6(1A) Advance payment of tax As provided in 6(1A) Assessee can adjust against the amount for subsequent period 6(4) Payment of tax on provisional assessment Assessee has to apply to the Assistant Commissioner/Deputy Commissioner who has to approve provisional assessment Assessment have to be later finalised by Assistant Commissioner/Deputy Commissioner and any short paid duty has to be paid by the assessee with interest and if duty i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In my view, while the appellant s case will be covered by Rule 6(4A), it is incumbent on us to examine entitlement to adjustment as per Rules 6(4A) and 6(4B), in view of the question framed and answered by the High Court in this very case that the Tribunal was not justified in remanding the matter without recording any finding of assessee s adjustments in terms of provisions contained in Rule 6(4A) and 6(4B). Rule 6(4B) is quite clear that any adjustment under Rule 6(4A) is subject to the following four conditions laid down in Rule 6(4B): i) Excess payment is not on account of reasons involving interpretation of law, taxability, classification, valuation or applicability of the exemption notification; ii) If the assessee is registered under sub-rule (2) of Rule 4 on account of delayed receipt of details of payments towards taxable services, adjustments may be done without any limit; iii) In other cases, the maximum adjustment per month (or as the case may be quarter) was initially Rs. 50,000/- increased to Rs. 1,00,000/- from 1.3.2008 and further to Rs. 1,50,000/- iv) The details and reasons of adjustments must be intimated to the jurisdictional Superi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e payment of tax under Rule 6(1A); b) the appellant has not followed the procedure prescribed under Rule 6(4B) as required for Rule 6(4A) and the adjustments sought are in excess of the limits under Rule 6 (B). c) Consequently, the appeal is rejected and the impugned order is sustained. (P. V. Subba Rao) Member (Technical) 40. In view of the above, we direct the registry to place the matter before Hon ble President to consider referring the following difference of opinion to a third Member for resolution. Difference of Opinion There being difference of opinion between the Members, the following questions are framed for consideration by the ld. Third Member:- Q.1. Under the fact that service tax was payable on receipt basis during the period under dispute and admittedly, the assessee paid service tax at the time of raising of the invoice. Such payment has been held to be tax paid in advance by Member (Judicial), qualifying as advance tax under Rule 6(1A) of the Service Tax Rules. OR As held by the Member (Technical) that such payment of tax prior to due date is not advance tax but excess payment of tax qualifying f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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