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PJ/Case Law/2014-15/2378

Adjustment of excess service tax paid cannot be denied for technical grounds.

Case:-M/s JUBILANT ORGANOSYS LTD VERSUS COMMISSIONER OF CENTRAL EXCISE, MEERUT-II

Citation:-2014-TIOL-1870-CESTAT-DEL

Brief Facts:-This order is in respect of appeals Nos. ST/789-790/2008, ST/619-620/2009, ST/49-50/10 and ST/54/10 filed by the M/s. Jubilant Organosys Ltd. (hereinafter referred to as the appellants) and their Misc. Applications Nos.ST/55368-55369/2013 seeking extension of stay.

The issue involved in this case is whether the excess service tax paid in same months can be adjusted by the appellants in the following months. The Commissioner (Appeals) up held the decision of the Adjudicating Authority which held that as the procedure prescribed under Rule 6(4A) of Service Tax Rules 1994 has not been followed and so such adjustment cannot be permitted and accordingly confirmed the demands but did not impose any penalty. The appeal No. ST/789-790/2008 are against confirmation of the said demands amounting to Rs. 11,81,565/- and Rs. 5,21,739/-. The Commissioner vide orders in revision revised the Orders-in-Original under the provisions of section 84 of the Finance Act 1994 for not imposing penalty on the appellants and ordered imposition of penalty under Section 76 ibid. The appeals Nos. ST/619-620/2009 are against said the orders in revision passed by the Commissioner. Appeals Nos.ST/49-50,54/2010 relate to refunds of excess duty paid during certain months which were claimed as the adjustments were not allowed but were not sanctioned.
 
Appellant contentions:-The appellants have contended that the issue whether the adjustment of service tax paid in excess during certain months can be adjusted towards Service Tax liability of the subsequent months has been subject matter of various judicial pronouncements settling the issue in their favour. They have referred to the following judgments in their support:
·         CC, Patel & Associates Pvt. Ltd. Vs. Union Of India 2013 (32) STR 392 (H. C.) = 2012-TIOL-742-HC-AHM-ST        
  

·         M/s. Bank of Rajasthan Ltd. Vs. CCE, Jaipur - 2010-TIOL-1171-CESTAT-DEL

·         Gujarat NRE Coke Ltd. Vs. CCE, Rajkot 2012 (27) STR 372 (Tri-Ahmd.) = 2012-TIOL-600-CESTAT-AHM

·         BSNL Vs. CCE, Chandigarh 2011 (24) STR 719 (Tri.) = 2011-TIOL-2026-CESTAT­-DEL

·         Nirma Architects & Valuers Vs. CCE, Ghaziabad 2006(1) STR 305 (Tri.) = 2005- TIOL-1267-CESTAT-DEL
 
Respondent Contention:-The ld. DR did not object to the relevance of the case laws cited.
 
Reasoning of Judgment:-The Tribunal has considered the facts of these cases and the relevant judicial pronouncements on subject matter cited above. All these judicial pronouncements have in effect held 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 such technical grounds. Indeed, in a very recent CESTAT judgment (order No. 52863/2014 dated 10.07.2014) in the case of Bharat Sanchar Nigam Limited the issue has been considered and decided in favour of the assessee. Thus, the issue stands settled in favour of the appellants and is no longer res-integra. Accordingly, the appeals No. ST/789-719/2008 was allowed. As the impugned adjustment itself has been up held, the penalty imposed in the revisionary orders does not sustain. Accordingly appeals ST/619-620/2009 are also allowed. Having upheld the impugned adjustments the appeals Nos. ST/49-50/2010 and ST/54/2010 relating to refund are dismissed as infructuous. In view of the disposal of these appeals, their miscellaneous application seeking extension of stay is also dismissed as infructuous.

Decision:-Appeal Allowed.

Comment:-The crux of this case is that the adjustment of excess amount paid as service tax in a particular month cannot be denied to assessee for technical grounds. Moreover, the issue of adjustment of excess service tax paid is also covered by a number of decisions and so accordingly, the appeal was allowed.
 
Prepared by: Hushen Ganodwala. 

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