2026-VIL-135-CESTAT-CHE-ST
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SERVICE TAX CESTAT Cases

Service Tax - Adjustment of service tax paid in respect of the services provided to appellant outside India by the Service Provider located abroad, applicability of Rule 6(3) of Service Tax Rules 1994, requirement to refund value of service and service tax as per Rule 6(3) – Appellant paid service tax on technical consultancy services provided by a foreign service provider, both in India and outside India and paid service tax on it - Appellant adjusted excess service tax against its subsequent service tax liability. The department demanded this amount on the ground that such suo motu adjustment was not permitted under Rule 6(3) of Service Tax Rules, 1994 and the appellant should have filed a refund claim under Section 11B of the Central Excise Act, 1944 as made applicable to service tax - Whether the appellant's suo motu adjustment of excess service tax paid against its subsequent service tax liability under Rule 6(3) of Service Tax Rules, 1994 is valid - HELD - The Rule 6(3) applies only to a situation where the service provider has received payment for taxable services in advance, paid the service tax to the government and is then unable to provide the services wholly or partially. This scenario does not apply to the present case where the appellant, as the service recipient, had paid service tax by oversight - In the present case, the appellant should have filed a refund claim under Section 11B of the Central Excise Act, 1944 as made applicable to service tax matters by Section 83 of the Finance Act, 1994. The appellant has failed to rebut the statutory presumption under Section 12B of the CEA, 1944 (as made applicable to service tax) that the incidence of service tax has been passed on to the buyers/service recipients. The burden is on the appellant to establish that it has not passed on the incidence of service tax, which the appellant has failed to do - The impugned order confirming the demand along with applicable interest is upheld and the appeal is dismissed
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