B.L. Kashyap & Sons Ltd Vs Commissioner of Service Tax (CESTAT Delhi)
In the case of M/s. B.L. Kashyap & Sons Ltd. v. Commissioner of Service Tax [Service Tax Appeal No. 54315 of 2014 dated May 30, 2013], the CESTAT (Customs, Excise and Service Tax Appellate Tribunal) in Delhi, while invalidating the challenged order, overturned the liability and ruled that the appellant is entitled to offset the underpaid service tax against the excess tax paid in subsequent months/quarters, in accordance with Rule 6 (4A) of the Service Tax Rules, 1994. The appellant had rectified the shortfall in service tax payment and had also paid the corresponding interest amount.
Facts:
M/s. B.L. Kashyap & Sons Ltd. (“the Appellant”) has mistakenly paid short Service Tax in the initial months of April, August, and September and excess Service Tax in the months of May, June, and July due to the newly introduced Works Contract Services.
The Commissioner of Service Tax (“the Respondent”) issued a Show Cause Notice dated April 24, 2009 (“the SCN”) seeking recovery of the service tax of Rs. 1,58,52,669/- for wrongfully adjusting the Service Tax under Rule 6(3) of the Service Tax Rules along with the Penalty and the interest. The Adjudicating authority duly confirmed the order.
The Appellant contended that the present case is a result of incorrect filing of the entries in the ST-3 returns under Rule 6 (3) instead of Rule 6(4A) of the Service Tax Rules. They have made good the service tax short paid along with interest which cannot be demanded again simply because the same was mentioned in the wrong columns in the return.
The Appellant further contended that the SCN is merely based on the premise that the adjustments were in terms of Rule 6(3) of Rules and based on the facts that the appellant failed to produce evidence in consonance with the payment received for providing such services.
Aggrieved by the Adjudicating Authority’s order (“the Impugned Order”), the Appellant filed the appeal before CESTAT, Delhi.
Issue:
Whether the short tax paid in returns can be adjusted with the excess tax paid in subsequent months/quarters?
Held:
The CESTAT, Delhi in Service Tax Appeal No. 54315 of 2014 held as under:
