By Puloma Dalal, Jayesh Gogri, Chartered Accountants
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Service tax paid on advance money received. Amount refunded along with service tax, – Rule 6(3) of Service Tax Rules applicable and not section 11B, hence credit claimed without time limit.
Facts:
The appellant collected advance from its clients and paid service tax on the same. Due to unforeseen circumstances, they refunded the advances along with service tax. The appellant filed a refund claim of which part amount was rejected on the grounds of time bar u/s. 83 of the Finance Act, 1994 read with section 11B of the Central Excise Act, 1944.
The appellant contended that, in the present case, Rule 6(3) of the Service Tax Rules, 1994 was applicable and thus they were eligible to avail credit of service tax paid by them since they have refunded the amount along with service tax to their clients.
The department contended that the amount was collected as service tax and deposited with the Government. Further, placing reliance on the Tribunal’s decision in case of Gujarat Road Transport Corporation, they contended that once the provisions of section 11B were invoked, the refund claim was to be filed within 1 year from the relevant date.
Held:
Citing Rule 6(3) of the Service Tax Rules, 1994, the Tribunal held that the present case was covered by Rule 6(3) since all the conditions mentioned in the said Rule were satisfied. The Tribunal further observed that the appellant was again carrying on the same business and the appellant could utilise the credit of such excess service tax paid. Rule 6(3) of the Service Tax Rules, 1994, does not prescribe any time limit and therefore, the appellant could avail the total credit of such excess service tax paid for discharging subsequent service tax liability.
