2016 (6) TMI 362 - AT - Service Tax

Tribunal grants relief to appellant, allowing adjustment of excess service tax paid.

The tribunal allowed the appellant's appeal, citing Rule 6(3) of the Service Tax Rules, which permits adjustment of excess service tax paid for subsequent ... Self Adjustment of excess service tax paid with the service tax liabilities for subsequent period - Service tax amount paid at higher rate for the service tax liabilities - Held that:- it is found that Rule 6(3) of the Service Tax Rules clearly provides for such adjustment. Therefore, the impugned order is set aside. - Decided in favour of appellant with consequential relief Issues:Adjustment of service tax paid at a higher rate for subsequent period liabilities.Analysis:The appellant, registered for providing banking and financial services, paid service tax on various services including service charges, processing fee, and commission on Inland letter of guarantee. The appellant refunded certain amounts to recipients based on credibility, adjusting the service tax liability on the net balance amount. The service tax department objected to this adjustment, resulting in a demand confirmation with interest and penalty. The appellant appealed against the order, citing Rule 6(3) of the Service Tax Rules, allowing adjustment of excess service tax paid for subsequent liabilities if the value of taxable service and service tax thereon is refunded. The tribunal found merit in the appellant's argument, setting aside the impugned order and allowing the appeal in favor of the appellant with consequential relief as per law.This judgment primarily revolves around the interpretation and application of Rule 6(3) of the Service Tax Rules regarding the adjustment of excess service tax paid for subsequent liabilities. The tribunal analyzed the facts of the case, emphasizing the appellant's compliance with the rule by refunding the value of taxable service to the recipients. The tribunal's decision was based on a strict interpretation of the statutory provision, finding no merit in the impugned order due to the clear provision allowing such adjustments. The tribunal's ruling highlights the importance of adherence to statutory provisions in service tax matters and upholding the rights of taxpayers to adjust excess payments against future liabilities in accordance with the law.In conclusion, the tribunal's judgment in this case clarifies the applicability of Rule 6(3) of the Service Tax Rules in allowing the adjustment of excess service tax paid for subsequent liabilities. By setting aside the impugned order and ruling in favor of the appellant, the tribunal upheld the statutory provision and provided relief to the appellant in line with the legal framework governing service tax liabilities and adjustments.