Book adjustment for service tax payment is valid discharge where departmental instructions support remittance and TR-6 challans are absent.

Service tax paid by a Central Government department through inter-departmental book adjustment was treated as valid discharge of liability where the payment followed departmental instructions and was supported by a CBEC office memorandum. The absence of TR-6 challans for verification did not, by itself, justify treating the tax as unpaid or sustaining a fresh demand for an amount already remitted through the prescribed governmental mechanism. The demand was therefore unsustainable, and the impugned order was set aside in favour of the assessee.

---

---

Issues: Whether service tax paid by a Central Government department through book adjustment, instead of TR-6 challans, could be treated as valid discharge of tax liability and whether demand could be sustained on the ground of non-production of TR-6 challans for verification.

Analysis: The dispute did not concern tax liability itself but only the mode of remittance. The payment was made in accordance with departmental instructions and was supported by inter-departmental book adjustment accepted by the Central Board of Excise and Customs through an office memorandum. In these circumstances, the absence of TR-6 challans for verification could not justify treating the tax as unpaid or raising a fresh demand for an amount already remitted by the prescribed governmental mechanism.

Conclusion: The demand could not be sustained. The payment through book adjustment was accepted as proper discharge of service tax liability, and the impugned order was set aside in favour of the assessee.

---