TaxTMI 
TaxTMI 
2022 (3) TMI 510
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....y of interest at appropriate rate (as applicable during the material period on the demand of Service Tax confirmed at Para 16.1 above, under the provisions of Section 75 ibid. 16.3 I impose a penalty of Rs. 10,000/-(Rupees Ten Thousand only) on the assessee, M/s Namrata Developers. for their failure to file correct service tax returns, during the period from October 2011 to March 2012, as provided under Section 70 ibid, under the provisions of Section 77(2) ibid. 16.4 Since the penalty is proposed to be imposed under Section 78 of the Act, I refrain from imposing penalty under Section 76 of the Finance Act, 1994 upon M/s Namrata Developers. 16.5 I impose penalty of Rs. 30,60,691/-(Rupees Thirty Lakhs Sixty Thousand Six Hundred And Ninety One Only) M/s Namrata Developers., under Section 78 of the Act. I also give an option as provided under 1st and 2nd proviso to Section 78 of the Act that if the service tax amount along with interest is paid within 30 days from the date of receipt of this order, the noticee is liable to pay penalty equal to 25% of the service tax confirmed at 16.1 above. However, this option is available to the noticee if the Penalty is also pa....
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....e of scrutiny Appellant was only advised that the Service Tax was required to be paid on the receipt/ due basis and not on the agreement basis. After filing of the Service Tax return * Appellant, themselves realized that such change of mode of calculation i.e. shift from calculation on agreement basis/Accrual basis to receipt cum due basis resulted in the wrong computation of the Service Tax liability and wrong reporting in ST-3 returns. * They adjusted the excess amount of the service tax paid by them during the period October 2010 to September 2011, and reflected in the ST-3 returns filed by them during the period October 2011 to March 2012, as indicated in table below: Period Oct'10 to March '11 Apr'11 to Sept'11 Oct'11 to Mar'12 Total Total Tax payable as per actual receipts after abatement 4,33,341 19,65,679 52,64,857 76,63,877 Total Tax paid 11,24,132/- [6,90,790 excess paid] 24,47,769. [4,82,090 excess paid] 40,91,977 [11,72,880 excess adjusted ] 76,63,877 * Further, Appellant vide letter dated 28/01/2013 intimated the department about excess payment made by them and subsequent adjus....
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...., submits:- * Appellant is entitled to avail the benefit of Rule 6(4A) of the Service Tax Rules, 1994 subject to prescribed procedure laid down under the Law. the adjustment of excess amount paid under Rule 6(4A) is subject to the following conditions namely - * Excess amount paid is on account of reasons not involving interpretation of law, taxability, classification, valuation or applicability of any exemption notification. * The details and reasons for such adjustment shall be intimated to the jurisdictional Superintendent of Central Excise within a period of 15 days from the date of such adjustment * Before applying the Rule 6(4A) of the Service Tax Rules, 1994, it is necessary for the appellant to establish that there was excess payment of Service Tax, In this regard, the first appellate authority, in Para 7.1 of the Order-in- Appeal dated 25.07.2016, has observed that the documents submitted by the appellant to substantiate their claim of excess payment are incoherent, not co-relatable and unsustainable. * The case laws sighted by the appellant are distinguishable as given below: * Siemens Ltd. [2013 (29) STR 168 Tri. - Chennai], Rajdeep Buildcon Pvt. Ltd. [2011 (....
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.... 2012. c. Whether extended period can be invoked and penalties imposed on the appellant. 4.3 In respect of issue at "a.", I observe that Section 73 (3) of the Finance Act, 1994 clearly lays down as follows: (3) Where any service tax has not been levied or paid or has been short-levied or short-paid or erroneously refunded, the person chargeable with the service tax, or the person to whom such tax refund has erroneously been made, may pay the amount of such service tax, chargeable or erroneously refunded, on the basis of his own ascertainment thereof, or on the basis of tax ascertained by a Central Excise Officer before service of notice on him under sub-section (1) in respect of such service tax, and inform the [Central Excise Officer] of such payment in writing, who, on receipt of such information shall not serve any notice under sub-section (1) in respect of the amount so paid : Provided that the Central Excise Officer may determine the amount of short-payment of service tax or erroneously refunded service tax, if any, which in his opinion has not been 18 paid by such person and, then, the Central Excise Officer shall proceed to recover such amount in the manner....
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....xcess amount paid - under Rule 6(4A) of the Service Tax Rules, 1994 (hereinafter referred to As STR). From the submissions made by the Appellant, I find that their contention of excess payment of service tax is too weak) Even though they have submitted various documents to substantiate their claim of excess payment of service tax, the said documents are not correlatable For example, the summary of calculation of the service tax liability in tabular form, as mentioned in the service tax returns have been enumerated at Page No. E, G and H of their written submissions. However, the amounts, figures in all the three tables are at variance and far from correlation. Similarly, I find that the submissions in this regard are also incoherent, not relatable and unsustainable as they are far from any logic. 7.2 Assuming but not accepting the Appellant's claim that there was an excess payment, I find that Rule 6 of STR relates to payment of service tax. Sub Rule 4A of the said Rules states that 'where an assessee has paid to the credit of Central Government any amount in excess of the amount required to be paid towards service tax liability for a month or quarter, as the case ma....
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....unded the value of the taxable service and the service tax thereon to the person from whom it was received. Thus the conditions to be satisfied for adjustment of excess payment of service tax during some period against service tax liability for subsequent period are that - (a) the excess payment must be relatable to some service or services not provided for which payment had been received by the service provider; and (b) the payment for the services not provided along with service tax paid on it has been refunded to the person from whom it was received." Rule 6(3) will not be attracted in cases where excess payment is due to reasons other than that mentioned above e.g. payment of service tax at higher rate or higher value etc." 4.7 Admittedly the service tax on the activities undertaken by the appellants was introduced with effect from 22.06.2010. Initially appellants discharged the tax liability on the transactions undertaken by them on the accrual basis. Financial Accounting in India is mostly on the accrual basis. All the direct and indirect taxes are also based following the principal of Financial accounting on the accrual basis. In the accrual basis of Fi....
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....receiving the entire consideration as per the agreement. Subsequently appellant realized their mistake and started filing their ST-3 returns on the basis of Receipt. So the ST-3 return for the period October 2011 to March 2012 was filed by the appellant on the receipt basis. At "F. Value of taxable Service tax payable and gross amount charged (all figures in rupees) for service provider.", is indicated. In the table against, "Total gross Amount received in money, against the service provided" appellant has indicated Rs. 204,560,492/- and have determined his service tax liability on the basis of this taxable value so computed. However while discharging the service tax liability they claimed adjustment as per Rule 6 (4A) of the Service Tax Rules, 1994 toward the service tax paid by them during the period October 2010 to September 2011, in respect of the amounts that they had not received during the said period. On page 118, is Annexure L, giving the details of all the 124 agreements against which the appellants had received the part consideration during that period. Annexure L also list outs the payment received by the appellants against the 13 (Annexure B) and 42 (Annexu....
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....is seen that the assessee is permitted to pay service tax in advance and the same can be adjusted against service tax which he is liable to pay for subsequent period provided assessee intimated amount paid in advance to the jurisdictional Superintendent of the service tax within period of 15 days from date of such payment and intimate the details of advance payment made and its adjustment in the subsequent return to be filed under Section 70 of the Act. In the present case there is no dispute that appellant have deposited advance service tax of Rs. 2,57,205/-. As regard the condition provided in the proviso to Rule 6(1A), it is observed that regarding the excess payment though the specific intimation was not given to the Superintendent, but from facts, it is clear that excess payment was reflected in ST3 returns for the period Oct.-Dec., 2009 and adjustment thereof was reflected in the ST3 returns for the quarter ending March, 2010. The details of these excess amount as well as adjustment was revealed only on the scrutiny of these returns therefore it cannot be said that appellant have not complied with conditions prescribed in the proviso to Rule 6(1A) of Service Tax Rules, 1994. ....
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.... was payable. In respect of service already rendered in March but payment not received even though the assessee was not required to make the payment they had made the payment. In such a situation all they had to do was in the accounts maintained, show that service tax as paid on March for invoice issued in April. Therefore, the question of paying the service tax for the portion of service rendered in March, 2008 again in April, 2008 does not arise. The impugned order requires the appellant to pay service tax twice on the same service rendered just because they made an advance payment of service tax. In fact, it was a practice in Central Excise department to require the assessee to debit in PLA in the month of March, 2008 even in respect of the goods not cleared. Subsequent clearances against these payments cannot be called as adjustment. If the assessee makes an advance payment towards service rendered, the service tax cannot be demanded once again. In my view, therefore, it will not be correct to say that this is covered by the provisions of Rule 6 of Service Tax Rules, 1994 and therefore the assessee was wrong in adjusting the amount subsequently. In fact it was the assessee's cl....
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....endered, invoices raised and payment received for the month and service tax paid for the month of March and April, 2008 and show to the adjudicating authority that there was an advance payment for service rendered in March, 2008. If it is shown that assessee had paid the tax in advance, in my opinion, no further proceedings would he required against the appellant. However, while remanding the matter, I make it clear that this remand is to be taken as an open remand with all issues open and observations made are only for the purpose of remand. The original adjudicating authority shall be at liberty to consider all the issues and pass a well reasoned order. 2010 (20) S.T.R. 815 (Tri. - Chennai) CHETTINAD CEMENT CORPORATION LTD. Versus COMMR. OF C. EX., TRICHY Heard both sides. Both sides confirm that this is not a case of either delayed payment of service tax or failure to pay service tax. On the other hand, the service tax was paid in excess during the month of March, 2007 which has been adjusted towards the service tax liability for the subsequent months. In a way the appellants have paid tax in advance. As such, they cannot be penalized under Section 76 of the Finance Act, 199....