Tribunal upholds decision on service tax demands, citing unintentional lapses. Commissioner rejects appeal.

The Tribunal upheld the Order-in-Original dropping ineligible service tax demands against a respondent, a PSU, due to unintentional procedural lapses. The Commissioner(Appeals) rejected the Revenue's appeal, emphasizing that the excess payment was declared in the ST3 return, informing the department indirectly. The Tribunal found no malice on the respondent's part and dismissed the Revenue's appeal, affirming the lower authorities' decision based on procedural lapses. The judgment was pronounced on 27/10/2017.

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Issues:
Appeal against Order-in-Original upholding ineligible service tax demands due to procedural lapse.

Analysis:
The appeal was filed by the Revenue challenging the Order-in-Original passed by the Commissioner(Appeals) upholding the demands of service tax on ineligible availment of advance tax by the respondent. The respondent had failed to intimate the department as required by Rule 6(1A) of the Service Tax Rules, 1994. The Order-in-Original dropped the demands citing duplication of payment and unintentional procedural lapse. The Department contended that the excess payment made by the assessee did not comply with the formalities for advance tax payment as per the rules. They also alleged suppression of facts by the assessee to evade tax payment.

On appeal, the Commissioner(Appeals) rejected the Revenue's appeal, stating that the adjustment of excess payment was declared in the ST3 return, and thus, the department was informed indirectly. The Commissioner held that the procedural lapse did not justify the retention of excess payment by the government. The Revenue argued that both lower authorities favored the assessee based on procedural lapses, without considering the legal aspects.

After hearing both sides, the Tribunal found no infirmity in the impugned order. It noted that the respondent was a PSU and there was no malicious intent on their part. Consequently, the Tribunal upheld the impugned order, dismissing the appeal of the Revenue. The judgment was pronounced in open court on 27/10/2017.

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