2019 (2) TMI 17

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....August, 2005. It was also noticed that in the relevant ST-3 returns for the subject period, adjustment to the extent of Rs. 1,74,41,177/- was made for the period from June, 2005 to August, 2005 being service tax and Rs. 3,48,805/- being education cess. The said adjustments were shown as excess service tax paid in previous months. The issue of short payment of service tax was communicated to the assessee. The assessee vide letter dated 18.03.2008 replied that they had made adjustments of the tax excess paid by them. The department was of the view that the appellant did not intimate the department about the adjustment and that the provisions of service tax did not allow such adjustment of service tax and that appellant ought to have sought fo....

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....t the service tax liability of the months of June, 2005 to August, 2005. The appellant filed ST-3 returns for the period April, 2005 to September, 2005 on 25.10.2005 wherein the adjustment was separately shown in such return. In the course of audit, when objection was raised, the appellant had explained the adjustment made by the appellant. This happened during the transition period when the liability to pay service tax was shifted upon the service recipient, on the commission paid on mutual fund distribution activity. 2.2 He adverted to Sub-section 4A of Rule 6 of Service Tax Rules, 1994 and submitted that the said provision offers an option for the assessee to make such adjustment. He relied upon the decisions of the Tribunal in the foll....

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.... adjustment so made. The appellant herein has not informed the department and therefore the adjustment is in violation of law. Further, the adjudicating authority has discussed that the adjustment is made from the amount of commission that is received by the appellant after 01.04.2005 for the services provided up to 31.03.2005. In that case, the appellant cannot adjust the service tax paid by them towards the liability for subsequent months. If there is any excess service tax paid, the appellant ought to have filed a refund claim. The appellant not having intimated the department and sought permission for making adjustment is guilty of suppression of facts. The demand as well as the penalties imposed are legal and proper. 4. Heard both sid....

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.... by them, they adjusted the said service tax towards the liability for the subsequent months, ie. June, 2005 to August, 2005. They have reflected the adjustment made in their ST-3 returns for the said period in October, 2005. The Tribunal in the case of General Manager (CMTS) (supra) had occasion to analyse the issue wherein such adjustment was made. It was observed there in that when the assessee has paid service tax in excess of its actual tax liability, the Government cannot retain the excess tax paid by the assessee by refusing such adjustment against its tax liability during other months. Similarly in M/s. Plantech Consultants Pvt. Ltd.(supra), it was held that even though the appellant had not intimated the jurisdictional superintende....