2016 (9) TMI 894 - AT - Service Tax

CESTAT allows adjustment of excess service tax, emphasizes adherence to legal provisions

The Appellate Tribunal CESTAT NEW DELHI allowed the adjustment of excess service tax paid in the previous period against subsequent tax liabilities in the ... Whether the excess service tax paid by them in the previous period can be adjusted in the subsequent period, for neutralizing the subsequent tax liabilities - Held that:- the issue is no more res-integra and stands settled in their own earlier case BSNL Vs. CCE, Chandigarh [2011 (7) TMI 946 - CESTAT, NEW DELHI]. Therefore, as the issue is settled, we find no justifiable reasons to take a different view. As such by following the precedent the impugned orders are set aside. - Decided in favour of appellant Issues:Whether excess service tax paid in the previous period can be adjusted in the subsequent period to neutralize subsequent tax liabilities.Analysis:The Appellate Tribunal CESTAT NEW DELHI addressed the issue of adjusting excess service tax paid in the previous period against subsequent tax liabilities in the present appeals. Referring to a previous case involving BSNL Vs. CCE, Chandigarh, where such adjustments were allowed, the Tribunal noted that although the relevant Service Tax Rules were not in force at the time, the spirit of the amended rules allowed for such adjustments. The Tribunal took a lenient view due to the appellant being a public sector unit and set aside the impugned order while cautioning the appellant to strictly adhere to legal provisions in the future.The Tribunal cited another final order in the same assessee's case and a separate case involving Bharat Sanchar Nigam Limited, emphasizing that procedural obstacles should not hinder the assessee, especially considering the centralized registration taken by BSNL. Given the settled nature of the issue and in line with the precedents, the Tribunal found no reason to deviate from allowing the adjustments. Consequently, the impugned orders were set aside, and both appeals were allowed.In conclusion, the Tribunal's decision reaffirmed the possibility of adjusting excess service tax paid in the previous period against subsequent tax liabilities, based on the spirit of the amended Service Tax Rules and previous precedents involving the appellant. The Tribunal's stance aimed to provide relief to the appellant, a public sector unit, while emphasizing the importance of strict adherence to legal provisions in future dealings.