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TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 804
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....under the head 'Mining Services'. During the period of dispute October, 2006 to March, 2011, service tax was chargeable under Section 68(2) of the Finance Act, 1994 on 'receipt basis' (cash basis). The appellant was also doing the work of transportation for the same service receiver of coal, from the mine/ dump to the power plant of the service receiver. It was a condition in the contract that service tax shall be paid separately by the receiver of service. It was further stipulated that the service receiver shall pay the amount of service tax only on the production of evidence of payment/ challan by the appellant. Thus, the appellant immediately on raising of the invoice for the services rendered, used to deposit the service tax in advance and annexed the evidence of payment with the invoice, so as to receive the payment for services rendered including the service tax. The appellant booked the service rendered and tax thereon in the return for the subsequent months, when they received the payment. However, due to some clerical error in filling of the ST-3 form, the appellant committed error in properly reflecting the service tax brought forward, which was paid in advance in the pr....
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.... The Hon'ble High Court has held that the Tribunal has failed to discuss the relevant provisions and has given a finding on the basis of a chart, which did not form part of the proceedings before the adjudicating authority. The Hon'ble High Court framed the following substantial question of law:- "1. Whether the Tribunal was justified in law in remanding the case to the adjudicating Authority for working out the amount of adjustment claimed by the assessee without recording any finding of assessee's entitlement to adjustment in terms of provisions contained under Rule 6(4)(A) and (4)B of the Service Tax Rules, 1994?" This question has been answered in favour of the Revenue in the ex-parte order of the Hon'ble High Court. 5. Learned Counsel Sh. M. P. Devnath, appearing for the appellant urges that the Impugned Order has confirmed demand of Service tax along with interest and penalty, without appreciating the submissions made by the Appellant. That the conditions required to be fulfilled for availing the adjustment of excess tax in subsequent months is procedural in nature, and failure to comply with the same is required to be condoned in the interest of justice. The synopsis of ....
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....CESTAT Delhi wherein the Department sought to deny adjustment of excess tax under section 6(4A) of Service tax Rules on the ground, prescribed procedure has not been followed. Following the series of decisions settling the issue in favour of the Assessees, the Tribunal allowed adjustment of excess tax. 8.1. Further reliance is placed on the following decisions: - * Gujarat NRE Coke Ltd. Vs. CCE 2012 (6) TMI 581- CESTAT Ahmedabad; * BSNL vs. CCE 2019 (3) TMI 1754 - CESTAT Kolkata; * Larsen & Toubro Ltd. vs. CST 2017 (7) TMI 171 - CESTAT Mumbai . * General Manager vs. CCE 2014 (8) TMI 589- CESTAT Delhi. 9. That in view of the above settled legal position, the Impugned Order is liable to be set aside on this ground alone. 10. It is further submitted that the Appellant had deposited Service tax in advance during the relevant period as certain customers reimbursed tax component of the invoice only after the Appellant furnished evidence of deposit of Service tax. That said facts were explained time and again to the Department, right from the time of audit. However, in complete disregard of the same, the Department has taken a position that adjustment of excess or advance tax c....
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.... Commissioner of Central Excise or the Deputy Commissioner of Central Excise, as the case may be, on receipt of such request, may allow payment of service tax on provisional basis on such value of taxable service as may be specified by him and the provisions of the Central Excise Rules, 2002, relating to provisional assessment, except so far as they relate to execution of bond, shall, so far as may be, apply to such assessment. (4A) Notwithstanding anything contained in sub-rule (4), 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 may be, the assessee may adjust such excess amount paid by him against his service tax liability for the succeeding month or quarter, as the case may be. (4B) The adjustment of excess amount paid, under sub-rule (4A), shall be subject to the following conditions, namely: (i) excess amount paid is on account of reasons not involving interpretation of law, taxability, classification, valuation or applicability of any exemption notification; (ii) excess amount paid by an assessee registered under sub-rule (2) of rule....
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....eliance in this regard is placed on the decisions in the case of Laxmipat Singhania vs. CIT, U.P. 1969 (72) ITR 291; Mahaveer Kumar Jain vs. CIT, Jaipur [2018] 404 ITR 738 (SC). 18. It is further submitted that extended period is not invokable and penalty is not leviable in the instant case as the Impugned Order has not found any evidence of suppression, positive act of evasion etc. at the end of the Appellant. In any case, when excess tax stands deposited by the Appellant, which is clearly evident from the ST-3 returns filed by the Appellant, the Impugned Order is completely incorrect in law in applying the extended period of limitation and the penalty provisions against the Appellant. Reliance is placed on the decision given in the matters of Tamil Nadu Housing Board vs. CCE 1994 (74) ELT 9 (SC), CCE vs. Chempar Drugs & Liniments 1989 (40) ELT 276 (SC), CCE vs. HMM limited 1995 (76) ELT 497(SC). 19. Accordingly, prays for allowing the appeal with consequential benefits. 20. Learned Authorised Representative Sh. Ravi Kapoor for the Revenue relies on the impugned order. He further states that the appellant have failed to properly disclose the figures of 'advance tax' and 'carrie....
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....,61,932/- 46,59,251/- -- 27,02,681/- January, 2007 73,55,844/- 51,42,197/- -- 22,13,647/- February, 2007 36,78,608/- 58,36,931/- 21,58,323/- -- March, 2007 42,54,521/- 60,64,011/- 18,09,490/- -- Total 1,66,87,565/- 87,46,275/- Period April, 2007 to March, 2008 Month ST payable as per ST-3 ST paid Excess payment Short payment April, 2007 19,42,975/- -- -- 19,42,975/- May, 2007 38,49,495/- 67,32,267/- 28,82,772/- -- June, 2007 72,33,043/- 32,15,174/- -- 40,17,869/- July, 2007 26,01,149/- -- -- 26,01,149/- August, 2007 68,16,203/- 1,07,75,346/- 39,59,143/- -- September, 2007 48,52,855/- -- -- 48,52,855/- October, 2007 45,57,024/- 49,47,402/- 3,90,378/- -- November, 2007 86,44,184/- -- -- 86,44,184/- December, 2007 80,24,680/- 1,62,18,742/- 81,94,062/- -- January, 2008 88,94,753/- -- -- 88,94,753/- February, 2008 81,74,164/- 102,00,366/- 20,26,202/- -- March, 2008 63,57,958/- 90,60,954/- 27,02,996/- -- Total 7,19,48,483/- 2,01,55,553/- 3,09,53,785/- Not short paid - Rs.1,07,98,232/-....
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....determined on the date of payment. Such nature cannot be modified by Revenue, there being no such procedure available to it. Admittedly, in the facts of the present case, appellant have paid tax in advance at the time of raising of invoice and thereafter disclosed the payment as per Section 68(2) of the Finance Act, 1994, on receipt basis, when they received payment subsequently. We further find that inspite of appreciating (by the court below) that appellant have paid excess tax, which was in the nature of advance tax and the same was not adjusted due to clerical mistake on the part of the appellant, have failed to give adjustment of the tax and have raised frivolous demand, which is wholly against the provisions of Article 265 of the Constitution of India. Under the spirit of Article 265 of the Constitution of India read with the Charging Section 68(2) of the Finance Act, not a single rupee in excess can be collected and retained by Revenue. Thus, we hold that denial of giving credit of such advance/ excess payment of tax and failure to allow adjustment from the apparent tax liability in other months, is hit by Article 265 of the Constitution of India. Further, the tax paid in ad....
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....h Court because CESTAT is bound by the judgment of the High Court and cannot go beyond it and say that Rule 6(4A) and (4B) do not apply to the case at all and adjustment can be done under some other Rule. It also needs to be noted that the SCN and the impugned order were also issued invoking Rules 6(4A) and (4B) and not under some other Rules. 32. The text of the Rule 6 reads as follows: 6. Payment of service tax (1) The service tax shall be paid to the credit of the Central Government,- (i) by the 6th day of the month, if the duty is deposited electronically through internet banking; and (ii) by the 5th day of the month, in any other case, immediately following the calendar month in which the service is deemed to be provided as per the rules framed in this regard: Provided that where the [assessee is a one person company whose aggregate value of taxable services provided from one or more premises is fifty lakh rupees or less in the previous financial year, or is an individual or proprietary firm or partnership firm or Hindu Undivided Family],inserted vide Notification 19/2016-service tax the service tax shall be paid to the credit of the Central Government by the....
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....reasons not involving interpretation of law, taxability, valuation or applicability of any exemption notification; (ii) excess amount paid by an assessee registered under sub-Rule(2) to Rule4 on account of delayed receipts of details of payments towards taxable services may be adjusted without monetary limit. (iii) In cases other than specified in clause (ii) above, the excess amount paid may be adjusted with a monetary limit of Rupees fifty thousand for the relevant month or quarter, as the case may be. (iv) The details of such adjustment shall be intimated to the jurisdictional Superintendent of Central Excise within a period of fifteen days from the date of such adjustment. Subsequently, revised to Rupees one lakh from 1.3.2008 and Rupees 1.50 lakhs thereafter. 33. Rule 6(1) deals with the normal payment of service tax while 6(1A) provides for with 'advance payment of tax' subject to some conditions indicated therein, 6(4) deals with paying tax based on 'provisional assessment' and for this purpose applies the corresponding Central Excise Rules, 2002. Rule 6(4A) deals with 'excess payment of tax' and 6(4B) lists the conditions for 6(4A). 'Advance payment of tax',....
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....tatute in two consecutive provisions, it would be difficult to maintain that they are used in the same sense." [Member, Board of Revenue v. Arthut Paul Bentall, AIR 1956 SC 35, p. 38] 35. I disagree with my learned brother in his finding that even if it is not Advance Tax under Rule 6(1A) the appellant would get covered under Rules 6(4) and 6(4A). A plain reading of Rule 6(4) shows that it deals with provisional assessment which is not the case here. Rule 6(4A) deals with the adjustment of tax paid in excess in one month in the subsequent month. However, Rule 6(4A) must be read with Rule 6(4B) which says that such adjustment will be subject to some conditions specified in it. In my view, while the appellant's case will be covered by Rule 6(4A), it is incumbent on us to examine entitlement to adjustment as per Rules 6(4A) and 6(4B), in view of the question framed and answered by the High Court in this very case that the Tribunal was not justified in remanding the matter without recording any finding of assessee's adjustments in terms of provisions contained in Rule 6(4A) and 6(4B). Rule 6(4B) is quite clear that any adjustment under Rule 6(4A) is subject to the following four condi....
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....ice or equity. If the Rules place some conditions or monetary limits for adjustments, it is not open for the Tribunal to change them or relax them. The Tribunal has to apply the Act and Rules as they exist. In this case, it is a matter of record that the procedures prescribed under Rule 6(4B) as applicable during the relevant period were not followed. It is also a matter of record that the excess payment of tax in different months was several times - in one case over a hundred times- the limits set in Rule 6(4B). 39. Therefore, I find that: a) the appellant's case is one of excess payment of tax under Rule 6(4A) and not a case of advance payment of tax under Rule 6(1A); b) the appellant has not followed the procedure prescribed under Rule 6(4B) as required for Rule 6(4A) and the adjustments sought are in excess of the limits under Rule 6 (B). c) Consequently, the appeal is rejected and the impugned order is sustained. (P. V. Subba Rao) Member (Technical) 40. In view of the above, we direct the registry to place the matter before Hon'ble President to consider referring the following difference of opinion to a third Member for resolution. Difference of Opinion There b....