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Dell India Pvt. Ltd. Versus Commissioner Of Service Tax, Bangalore

2015 (12) TMI 1555 - CESTAT BANGALORE

Adjustment of excess paid service tax – rule 6(3) of STR, 1994 – change of rate of tax – short-payment of service tax – demand of tax, interest and penalty – alternative treatment advance payment of service tax - rule 6(1A) of STR, 1994 – Rules 4A and 4B of STR, 1994 - Held that: - 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 l .....

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ater period to the appellant assessee – appeal allowed – 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 be .....

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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 recovery of the same. 2.1 Revenue through its Order-in-Original dated 25-4-2011 issued by Addl. Commissioner confirmed this demand of service tax along with interest and penalties under Sections 76 & 77 of the Finance Act, 1994. 2.2 The assessee went in appeal to the Com .....

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pply. Learned advocate points out that some of their customers objected to higher rate of service tax and thereafter the assessee made rectification and adjusted this excess charged from the customers and excess payment made to the exchequer during subsequent periods by issuing credit notes to their customers and by raising fresh invoices by applying correct rate of tax. He also mentions that they revised their ST-3 returns for the said period by showing this adjustment by way of reduction in va .....

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out payment of service tax in advance to the credit of the Central Government; saying that as they have paid service tax on accrual basis (i.e. in advance) without waiting for the receipt of the service tax from their customers, this situation should be treated as payment of service tax in advance and it could be treated as service tax paid in advance and, therefore, adjustment during the subsequent period is allowed as per the provisions of Rule 6(1A) of the Service Tax Rules, 1994. Learned adv .....

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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 unde .....

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further points out that this case is also not covered under the provisions of Rule 6(4B) of the Service Tax Rules as whenever there is excess collection of the amount of tax payable, in order to make the adjustment of excess under Rule 6(4B), certain conditions are to be followed and complied with, which the appellant has not done. 4.3 The learned AR argues further that the subject matter concerning the appellant is also not covered under the provisions of Rule 6(1A) of S.T.R., 1994 as even if w .....

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of the submissions of both the sides, it is a fact that the appellant paid to the exchequer excess amount of service tax on account of applying higher rate of taxation (i.e. 12.36%) instead of correct rate of tax 10.3% as the rate had been reduced from 12.36% to 10.3% on 24-04-2009. The appellant had continued to raise their invoices to their customers at the old rate of 12.36% during the relevant period and accordingly paid excess service tax to the exchequer at the said excess rate of 12.36%. .....

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t s case cannot be covered under above quoted Service Tax provisions of 1994 and it was imperative on the part of the appellants to file refund claim within the prescribed limit 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 levie .....

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ifferent 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. April 2009 to September 2009. Revenue is also in agreement with the fact that there had been excess payment of service tax during the r .....

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above (Service Tax Rules) needs to be taken. I am accordingly taking the combined and liberal view of the Rules quoted above, whereunder the adjustment of the excess service tax paid would be allowed during the later period to the appellant assessee. Here I take the support from the decision of CESTAT, New Delhi in case of General Manager (CMTS) v. CCE, Chandigarh (supra). It is made clear that though this case law of CESTAT, New Delhi talks about excess payment of service tax, the issue was fa .....

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so when we consider the combined effect of the relevant provisions of Service Tax Rules, 1994 quoted above. The CESTAT, New Delhi s decision quoted above in this regard has discussed various provisions of Service Tax Rules, 1994. This discussion make the position more clear for the purpose of present facts. Here to have more clarity, the following is quoted from this decision :- 7.1 Thus sub-rule (4A) read with Rule (4B) (of Service Tax Rules, 1994) would apply to a situation where an assessee .....

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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 .....

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liability, which he is liable to pay in subsequent period, subject to the condition that he intimates the details of the amount paid in advance to the Jurisdictional Superintendent of Central Excise. The excess payment referred to in sub-rule (4A), read with sub-rule (4B), is like advance payment under sub-rule (IA) 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 .....

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