GENERAL MANAGER (CMTS) Vs. COMMISSIONER OF C. EX.

JUDGEMENT

(1.) THE appellant are engaged in providing taxable services in the category of telephone services. During scrutiny of their ST -3 Returns for the period October, 2006 to March, 2007, it was found that while paying service tax for the month of November, 2006 they had adjusted an amount of Rs. 9,13,200/ - which was paid in excess earlier and further, in the month of Jan., 2007, they adjusted an amount of Rs. 4,72,907/ - against education cess and the appellant had intimated about the said adjustment on 5 -3 -2007 but the department was of the view that the appellant could not make these adjustments as the appellant were registered under Rule 4(1) of the Service Tax Rules, 1994 and not under Rule 4(2). It is on this basis that the Joint Commissioner vide order -in -original dated 20 -3 -2008 confirmed service tax and education cess demand of Rs. 3,86,107/ - (sic) (service tax of Rs. 9,02,000/ - + education cess of Rs. 4,72,907/ -) against the appellant under Section 73(1) of Finance Act, 1994 along with interest thereon under Section 75 and besides this, imposed penalty on them under Section 76 ibid. In this order, the Joint Commissioner observed that only the assessee who provides taxable service from more than one premises or offices and has centralized billing system or centralized accounting systems in respect of such service and such centralized billing or centralized accounting system are located in one or more offices, can adjust the excess paid amount of service tax against their service tax liability for subsequent period under Rule 6(4A) read with Rule 6(4B) of the Service Tax Rules, 1994, if the assessee has opted for registration under sub -rule (2) of Rule 4 (Centralised Registration). On appeal being filed to the Commissioner (Appeals) against this order of the Joint Commissioner, the Commissioner (Appeals) vide order -in -appeal dated 15 -10 -2008 dismissed the appeal holding that adjustment in terms of Rule 6(4A) read with Rule 6(4B) is permitted only if the assessee has opted for centralized registration under Rule 4(2) or the Rule 5 of the Service Tax Rules, 1994. Against this order of the Commissioner (Appeals), this appeal has been filed by the assessee. Heard both the sides.

(2.) SHRI Sameer Agarwal, Advocate, ld. Counsel for the appellant, pleaded that there is no dispute that there is no short -payment of tax and that what the appellant have done is the adjustment of the excess paid service tax during the earlier months against their service tax liability for November, 2006 to the extent of Rs. 9,13,200/ - and similarly, adjustment of excess tax paid earlier against their education cess liability for the month of Jan., 2007 to extent of Rs. 4,72,907/ -, that this adjustment is permissible to the appellant in terms of Rule 6(4A) read with Rule (4B), according to which, notwithstanding anything contained in sub -rule (4), where an assessee has paid to the credit of Central Government, any amount in excess of the amount required to be paid towards service tax liability for a month or quarter, as the case may be, he may adjust such excess amount paid by him against his tax liability for succeeding month or quarter subject to the condition that the excess amount paid is on account of reasons not involving interpretation of law, taxability, classification, valuation or applicability of any exemption notification, that in this case, there is no dispute that the excess payment towards service tax during earlier month was not on account of any reasons involving interpretation of law taxability, valuation or applicability of exemption notification, that for such adjustment, the assessee is not required to apply and seek permission for provisional assessment in terms of sub -rule (4) of Rule 6, as sub -rule (4A) of Rule 6, starts with the words "notwithstanding contained in sub -rule (4)", and that in view of this, the impugned order denying the adjustment of excess service tax paid during certain months, against service tax/education cess liability for the subsequent months is absolutely incorrect. He pleaded that there is no condition in sub -rule (4A) and sub -rule (4B) of Rule 6 that for such adjustments, the assessee must have opted for centralized registration under sub -rule (2) of Rule 4. He, therefore, pleaded that the impugned order is not correct.

(3.) WE have considered the submissions from both the sides and perused the records.