Custom, Excise & Service Tax Tribunal
M/S. L & T Sargent & Lundy Limited vs Commissioner Of Central Excise & S.T., ... on 22 January, 2016
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL, West Zonal Bench, Ahmedabad Appeal No. : ST/13462/2014 (Arising out of OIA-VAD-EXCUS-002-APP-251-14-15 dated 09.07.2014, passed by Commissioner (Appeals) Central Excise, & S.T., Vadodara) M/s. L & T Sargent & Lundy Limited : Appellant (s) VERSUS Commissioner of Central Excise & S.T., Vadodara : Respondent (s)
Represented by :
For Appellant (s) : Shri R. Vishwanathan, Senior Advisor. For Respondent (s) : Shri S.K. Shukla, Authorised Representative.
For approval and signature :
Mr. P.M. Saleem, Honble Member (Technical) 1 Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982? No 2 Whether it should be released under Rule 27 of CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? No 3 Whether their Lordships wish to see the fair copy of the Order?
Seen 4 Whether Order is to be circulated to the Departmental authorities?
Yes CORAM :
Mr. P.M. Saleem, Honble Member (Technical) Date of Hearing / Decision : 22.01.2016 ORDER No. A/10051/2016 Dated 22.01.2016 Per : Mr. P.M. Saleem The appellants herein M/s. L&T Sargent & Lundy Limited had made excess payment of service tax of Rs. 2,49,858/- in May 2010 and subsequently adjusted the said excess amount paid towards payment of service tax during the months of June, July and August, 2010. However, the appellants had not intimated the said adjustment to the department and have suo-moto adjusted the same. Revenue was of the opinion that they are not eligible to do so in terms of Rules 6(4A) and 6(4B) of the Service Tax Rules, 1994 and confirmed the demand of service tax, alongwith interest. Penalties of Rs. 10,000/- under Section 77, and equivalent penalty of Rs. 2,49,858/- under Section 78 of the Finance Act, 1994 were also imposed on the appellants. The Commissioner (Appeals) upheld the demand and equivalent penalty under Section 78, and reduced the penalty of Rs. 10,000/- under Section 77 to Rs. 5,000/-. Aggrieved by the order of the Commissioner (Appeals), the appellants are before us.
2. Heard both sides. Shri R. Vishwanathan, Senior Adviser to the appellants appears and submits that there was no intention to evade payment of service tax and they have not adjusted any ineligible amount. It is not in dispute that they have paid the excess service tax amount of Rs. 2,49,858/- and the same is eligible to be adjusted towards the future service tax liabilities. It is his contention that though they had to intimate the department for such adjustments under the provisions of Rule 6(4A) and 6(4B), there was no such requirement under Rule 6(3) of the Service Tax Rules, 1994. He further submits that the limit of adjusting amount up to Rs. one lakh in the succeeding month was also applicable to adjustments under Rule 6 (4A) only and there were no such restrictions under Rule 6(3). He therefore submits that the issue is only of minor procedural defect, if any, and does not warrant imposition of equivalent penalty under Section 78 of the Finance Act, 1994.
3. On the other hand, learned Authorised Representative submits that the appellants are an established Company belonging to a big industrial group and that they are aware of the provisions, Rules and procedures. Therefore, such a unit ought to follow the procedures as laid down and violation of the same should be viewed seriously. He argues that therefore, the imposition of penalty under Section 78 is warranted.
4. On careful consideration of the arguments of both sides and perusal of the records, we find that there is no dispute about the fact that appellants have paid excess service tax amount of Rs. 2,49,858/- in May 2010. The dispute revolves around the procedure they have followed in adjusting the said excess amount against the future service tax liabilities in June, July and August 2010 suo-moto. We find force in the arguments of the learned Senior Adviser of the appellants that infringement of the procedure is not serious enough to impose equivalent penalty of Rs. 2,49,858/- under Section 78 in the instant case. It is so especially, since in reality there is no short payment of service tax of Rs. 2,49,858/- in the instant case, and it is a question about adjustment of excess service tax paid which has been adjusted suo-moto against the subsequent service tax liability.
5. We find that under the facts and circumstances of the instant case,the demand of Service Tax of Rs. 2,49,858/- and interest thereupon cannot be sustained, and the excess amount of Service Tax of Rs. 2,49,858/- paid earlier in May 2010 should be regularised against the Service Tax liability of Rs. 2,49,858/- during the months of June, July and August, 2010. We therefore direct the lower authorities to regularise the matter accordingly. The penalty of Rs. 2,49,858/- imposed under Section 78 is liable to be set-aside. We hold so. The demand of service tax of Rs. 2,49,858/- and interest, and equivalent penalty under Section 78 are set-aside. The penalty of Rs. 5,000/- under Section 77 as per the impugned Order-in-Appeal is upheld.
6. Appeal is allowed on the above terms.
(Order dictated and pronounced in the open Court) (P.M. Saleem) Member (Technical) .KL 4