CESTAT, NEW DELHI BENCH
Commissioner of Customs, Central Excise & Service Tax
MAY 14, 2012
1. As per facts on record, the appellant is engaged in the manufacture of sugar and molasses falling under Chapter 78 of Central Excise Tariff Act. They are availing services of goods transport agency for receiving the inputs in the factory as also for clearing the final product from the factory. The appellant, as recipient of GTA services, are required to pay Service Tax.
2. The appellant deposited an excess amount of Service Tax of Rs. 1,11,902/- in the month of March, 2006, Rs. 97,344/- in the month of March, 2007 and Rs. 1,09,266/- in the month of December, 2007, which were adjusted in the months of April, 2006 to September, 2006, April, 2007 and January, 2008 respectively.
3. They were issued a show cause notice on 17-10-2008 proposing to reject the above adjustment made by them. The original adjudicating authority however, allowed adjustment of excess paid “Service Tax of Rs. 1,11,902/- in terms of provisions of Rule 6(3) of Cenvat Credit Rules, for the period April, 2006 to September, 2006. However for the period April, 2007 to September, 2007 and October, 2007 to March, 2008, he held that in terms of newly introduced provisions of Rule 6(4B)(iii) with effect from April, 2007 adjustment to the extent of only Rs. 50,000/- was permissible. Accordingly, he allowed the adjustment to the extent of Rs. 50,000/- for the said period and confirmed the demand of balance amount of Rs. 43,344/- and Rs. 59,266/- along with interest and imposition of penalties. The said order of original adjudicating authority was confirmed by Commissioner (Appeals). Hence the present appeal.
4. It is seen that as per the provisions of Rule 6(3) wherever the assessee has paid excess Service Tax in respect of taxable service, which is not provided by him either wholly or partially for any reason, the assessee may adjust the excess Service Tax so paid by him against his Service Tax liability for the subsequent period, if assessee has refunded the value of taxable services and the Service Tax thereon to the person from whom, it was received. The lower authorities have granted the benefit of said Rule to the appellants for adjusting excess payment made in March, 2006. However, the benefit of said Rule does not stand extended for the period April, 2007 onwards by referring to the provisions of Rule 6(4B)(iii).
5. I have gone through the said Rule, which lays down that in a case other than specified under clause (ii), the excess amount paid by adjustment with monetary limit of Rs. 50,000/- for a relevant month or quarter, however, I find that Rule 6(3), under which relief stand granted to the appellant for the previous period, continues to remain on statute. The benefit of said provisions would be available to the appellant for adjustment of excess payments as even for the subsequent period all the conditions of said Rule 6(3) stand fully specified by the appellant. As such, reference to the provisions of Rule 6(4B)(iii) was not called for.
6. In view of the above, I set aside the impugned order and allow the appeal with consequential relief to the appellants.