CESTAT allows Refund of Excess Payment of Service Tax against Adjustment Towards other Period Liability [Read Order]

The Chandigarh Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has allowed the refund of excess payment of service tax against the adjustment towards other period liability.

The appellants, Competent Constructions were engaged in providing services under the category (i) Management, Maintenance or Repair services (ii) Erection, Commissioning or installation and (iii) Construction of Residential Complex and (iv) Commercial or industrial construction services.

On the basis of information, that the appellant had provided taxable services under the category of taxable services provided i.e. “Construction of Residential complex Services” and Commercial Construction services. An enquiry was conducted by Commissionerate Chandigarh, against the appellants and as a result, a show cause notice for the period from November 2005 to 31.03.2010 issued on 31.03.2011 and show cause notice for the period April-2010 to 31.03.2011 issued on 22.10.2011.

The demands were partially confirmed by adjudicating authority. Two separate appeals were preferred against the said OIO, one by the Department against the dropped demand and the other by the Appellants against the confirmed demand. That both the appeals were decided by a common OIA. That on the basis of above, it was observed that the appellants rendered services which fell under category of taxable services i.e." Construction of Residential Complex Services ""Management, Maintenance or repair Services and Electrical Installations under the category of "Erection, commissioning or installation on which the appellants were liable to pay service tax.

Accordingly, Show Cause Notice for the period 2011-12 issued on 23.04.2013 for demand of

Service tax and a statement issued under Section 73(IA) for the subsequent period for the period 2012-13, for demand of Service tax. Both demands were confirmed by the adjudication authority OIO along with penalty under Section 77 and penalty under Section 78.

The appellant submitted that the impugned order was not sustainable in law as the same had been passed without properly appreciating the facts and the law. He further submitted that the service tax liability on the service of Commercial and industrial constructions provided during the period 01.07.2012 to 31.03.2013 was discharged by the appellant in the year 2013-2014.

The Counsel further submitted that the Commissioner (Appeals) had wrongly held that the appellant had failed to establish correlation to the tax paid during the period 2013-2014 that was payable for the period 01.07.2012 to 31.03.2013.

Amandeep Kumar, appearing on behalf of the revenue reiterated the findings of the impugned order and submitted that the allegation of the appellant, that he had paid the service tax was discharged in the year 2013-2014.She further submitted that if the appellant had excess paid in their service tax returns for the period 2013-14, then there was a separate mechanism to handle the same as provided in Rule 6(4A) of the service Tax Act, 1994.

The counsel further submitted that there was no provision for adjustment of excess payment but the party had to file a refund for the excess payment.

A Single Bench of S. S. Garg, Member (Judicial) observed that if the contention of the appellant was accepted that they had paid excess service tax in the returns filed for the period 2013-14. Then the only course left to him was to seek refund of the same. There is no provision of adjustment of excess payment of service tax of one period towards the liability of the other period.

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