Tribunal Overturns Tax Demand Due to Missing Challans, Upholds Book Adjustment Method

The Tribunal set aside the Commissioner's order demanding payment of service tax amounting to Rs. 2.03 Crs for the period 2007-2008 to November 2012 due to the absence of TR 6 Challans. Despite the lack of Challans, the appellant's method of payment through book adjustment was in accordance with departmental guidelines, as confirmed by CBEC. The Tribunal deemed the demand unsustainable and allowed the appeal, emphasizing that the absence of TR 6 Challans did not invalidate the payment made through the accepted method of book adjustment.

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Issues: Dispute over payment of service tax not evidenced by TR 6 Challans for verification by Service Tax Officers.

Analysis:
1. The appellant, a Government organization, challenged the order of the Commissioner of Central Excise, Jaipur-I, dated 13/05/2014, regarding the payment of service tax amounting to Rs. 2.03 Crs for the period 2007-2008 to November 2012. The dispute revolved around the lack of TR 6 Challans as evidence of payment, although the tax liability was not contested.

2. The show cause notice alleged improper payment of service tax through book transfer, leading to the initiation of proceedings. During the hearing, the appellant's counsel and the Revenue's representative presented their arguments, and the appeal records were examined.

3. The guidelines issued by the Department of Post mandated the payment of service tax by the appellant. Correspondence and instructions highlighted that book adjustment between different Central Government departments was an accepted method of service tax discharge. An office memorandum dated 14/03/2013 from CBEC clarified the remittance method for various Central Government departments, including the appellant.

4. The Tribunal noted that the issue centered on the absence of TR 6 Challans for verification by the Jurisdictional Officer. However, considering that the appellant had remitted the amount through book adjustment as per their department's mandate, which was acknowledged by CBEC, the demand for payment based on the lack of TR 6 Challans was deemed unsustainable.

5. Consequently, the impugned order was set aside, and the appeal was allowed, emphasizing that the demand raised due to non-submission of TR 6 Challans could not be upheld based on the accepted method of payment through book adjustment as per departmental guidelines.

This detailed analysis of the judgment highlights the key issues, arguments presented, relevant guidelines, and the Tribunal's reasoning leading to the decision to set aside the order and allow the appeal.

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