BSNL Vs. COMMISSIONER OF CENTRAL EXCISE, CHANDIGARH

JUDGEMENT

(1.) HEARD both sides at length. In this case the appellant public sector unit has adjusted the excess payment made for one period in respect of tax liability for a future period on their own leading to the confirmation of demand and imposition of penalty against them by the authorities below. The Ld. Advocate Shri Sameer Agrawal states that such adjustment is permissible under Rule 6(3) of Service Tax Rules, 1994. Ld. DR vehemently opposes this contention and states that in case of BBC World (I)(P.) Ltd. v. CST : (2009) 20 STT 54 (New Delhi - CESTAT), it has been clearly stated as to where the said rule 6(3) can be applied. We reproduce, below para 4.1 of the said decision : -

(2.) HOWEVER , we find that subsequently the Service Tax Rules, 1994 have been amended providing for adjustment of excess payment against future tax liability under rule 6(4A) and 6(4B) of the Service Tax Rules, 1994. Even though these rules were not in force at the material time and therefore are not applicable to the case at hence, considering the spirit of the amended rules and the fact that the appellant is a public sector unit and the entire amount of tax has been paid by adjustment, we take a lenient view and set aside the impugned order. However, the appellant public sector unit is cautioned that they should follow the legal provisions strictly in future and any contravention will be seriously viewed. Appeal is allowed.