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2023 (6) TMI 371 - AT - Service TaxAdjustment of Advance tax paid (service portion) - Apportionment of advance received towards supply of goods and supply of services - Rule 6(4A) and 6(4B) of the Service Tax Rules, 1994 - HELD THAT:- There is no apportionment of advance in the invoice itself towards the cost of materials or service portion and no tax has been determined. Therefore, the contention of the appellant that the mistakenly appropriated a part of the advance towards service portion can not be faulted as it is not on record that the same was approved by M/s. VISA or they had any information that the appellant had appropriated part of the advance towards service portion. Therefore, if VISA had informed the appellant at a later stage that the whole of the advance was to be appropriated towards cost of material, the same cannot be disputed without any evidence to the contrary. It is a settled law that the terms of the contract between the parties are to be accepted so far as those do not infringe the law. Further, It is not disputed that the for all the time tax amount of 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. 1,87,93,063/- is not sustainable against the appellant and the same is hereby quashed - Appeal allowed. There is no rationale in contention of the department that the whole of 2nd installment of Rs. 40.25 crore should be considered towards service portion and is liable to service tax @10.3%. Demand is merely presumptive with no corroborative evidence and cannot be sustained. Therefore, appeal filed by the department is dismissed.
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