Bharat Sanchar Nigam Ltd Vs Commissioner of Central Excise & Service Tax (CESTAT Kolkata)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in Kolkata has ruled in favor of Bharat Sanchar Nigam Ltd (BSNL), confirming its eligibility to adjust excess service tax paid against future liabilities. This decision clarifies the interpretation of Rule 6(4A) of the Service Tax Rules, 1994, and provides a major financial relief for the company.
The case originated from a long-running dispute between BSNL and the tax authorities. After a direction from the CESTAT bench, both sides reconciled their accounts. The reconciliation report, signed by the Commissioner of CGST and CX, Patna, revealed a net excess payment of ₹11,29,452 made by BSNL. This amount was calculated after accounting for an initial excess payment of ₹17,40,891, a debit of ₹3,34,387 for excess Cenvat Credit taken by BSNL, and an interest payment of ₹2,77,052 on a separate liability.
Despite the reconciliation confirming the excess payment, the adjudicating authority had denied the refund. The authority’s refusal was based on an interpretation of Rule 6(4A), which states that excess service tax paid for a month or quarter can be adjusted against the liability for the “succeeding month or quarter.” The adjudicating authority interpreted this to mean only the immediately succeeding period.
