CESTAT adjudicated a service tax dispute involving contractual...

CESTAT adjudicated a service tax dispute involving contractual advances and service tax adjustments. The tribunal held that service tax is leviable only on actual services provided and invoiced, not on advances or mobilization payments. The appellant correctly adjusted excess service tax paid under Rule 6(3) of Service Tax Rules, 1994, following renegotiation of contract terms and conversion of mobilization advances. The tribunal found that advances in nature of earnest deposits do not attract service tax. The impugned order was set aside, confirming the appellant's right to adjust excess service tax through credit notes or refunds when services were not ultimately provided or contract terms were modified. Appeal allowed.