Adjustment of excess Service tax paid, against tax payable in following months cannot be denied merely on the grounds of non-compliance of procedure
Jubilant Organosys Ltd. (the Appellant) adjusted excess payment of Service tax paid in some months against tax payable in following months and contended that adjustment was valid. However, the Appellant also filed refund claims of the excess payment of Service tax for dealing with the situation if adjustment is not allowed.
The Adjudicating Authority denied the adjustment of excess paid Service tax on the ground that the procedure prescribed under Rule 6(4A) of the Service Tax Rules, 1994 the Service Tax Rules) has not been followed and accordingly confirmed the demand of Service tax against the Appellant. Thereafter, the Commissioner (Appeals) also upheld the demand confirmed by the Adjudicating Authority.
Being aggrieved, the Appellant preferred an appeal before the Hon’ble CESTAT, Delhi and while relying upon following judgments contended that the adjustment of Service tax paid in excess, in certain months towards the Service tax liability of the subsequent months cannot be denied on technical grounds:
The Hon’ble CESTAT, Delhi relying upon its very recent decision in judgment order No. 52863/2014 dated July 10, 2014 in the case of Bharat Sanchar Nigam Ltd.,
held that the matter is no longer res-integra that the adjustment of Service tax paid in excess in certain months towards Service tax liability of subsequent months under Rule 6(4A) of the Service Tax Rules cannot be denied merely on technical grounds. Hence, adjustment was allowed to the Appellant and alternative refund claims were dismissed as infructuous.