The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), granted relief to M/s. Aircel Limited, the appellant and deleted demand of short paid service tax with interest.
The appellant filed ST-3 returns for the period from 01.10.2007 to 31.03.2008 and subsequently filed revised return for the same period along with a letter wherein they had explained the circumstances under which the revised return was filed. They also furnished copies of the credit notes raised.
The Department concluded that the appellant had contravened the provisions of Rules 6(3), 6(4) and 6(4A) of the Service Tax Rules, 1994 since they had wrongly adjusted the excess paid Service Tax towards the payment of Service Tax pertaining to a latter period and on account of such wrong adjustment, there was short payment of Service Tax to the tune of Rupees two crores.
A Show cause Notice was issued to the appellant proposing to demand the short- paid Service Tax along with interest and also for imposing penalties. The Original Authority confirmed the demand along with interest and also imposed penalties. Aggrieved by such order, the appellant is before the Tribunal.
The Counsel for the appellant contended that during the impugned period, the appellant had discharged Service Tax for the period ending 31.03.2008 against the RCVS provided to the subscribers of M/s. Aircel Cellular Limited (ACL), which was not liable to be paid by the appellant as M/s. ACL had actually rendered the services. Likewise, M/s. ACL had remitted Rs.1 crore forty lakhs as Service Tax for the services actually rendered by the appellant.
The Counsel for the appellant drew support from the decision of the Apex Court in the case of M/s. Birla Corporation Ltd. v. Commissioner of Central Excise to argue that the Department cannot pick and choose to pursue demands against assessees when the issue involved has attained finality.
Deleting the service tax demand, the Bench comprising Sulekha Beevi CS, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “The Authorized Representative for the Department has not been able to counter the submission made by the Learned Counsel for the appellant that the Department has not appealed against the Order passed in the case of the associate- company viz. M/s. ACL.”
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