2026 (4) TMI 866

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.... of the Finance Act, 1994. 2. The issue, in brief, is that, the consequent to the Departmental audit, it was noticed that the appellant had not discharged Service Tax on "mobilization advances" received by them during the period 16.06.2005 to 31.06.2009. The appellant's, were engaged, inter alia, in the business of construction and were registered for providing various services including commercial or industrial construction service, construction of complex service, works contract service etc. For providing the said services, they used to receive mobilization advance from their customers towards the service to be provided. Department noticed that out of total receipt, they had already adjusted certain advance proportionately against the ....

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....of his views. 4. The Learned Advocate for the appellant has mainly submitted that such advances were received from their customers from time to time only for initial setting up and were in the nature of capital advance to be adjusted against future RA bills issued by them for rendering of actual service. Moreover, the Point of Taxation Rules, 2011 (Rules) was introduced vide Notification No. 18/2011-ST dated 01.03.2011, only, wherein, vide Rule 3, it was specifically provided that if the service provider issues an invoice or receives a payment even before the provision of the service, the service to that extent covered by the such invoice or to the extent payment received would be deemed to have been provided at the time of raising the i....

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....lant in due course through RA bills and it was more in the nature of running account, wherein, they were raising the bills after providing the service and were also discharging the Service Tax thereon. This is also an admitted fact that they had discharged Service Tax in respect of said services by utilizing the said advance for payments against RA bills from time to time. They have also informed the Department on many occasions that they have discharged the entire amount of Service Tax demanded by the Department and even post the interest there on has been fully discharged. Therefore, it cannot be a case where they failed to pay Service Tax on the services provided except that they paid such Service Tax on a later date at the time of actua....