Order Date – 20 April 2023

Parties: General Manager Telecom, BSNL Vs CCE & ST- Chandigarh

Facts – 

• The Appellant, M/s Bharat Sanchar Nigam Limited (BSNL), collects telephone bills are made through post offices, collection centers, banks etc., and therefore, the information regarding payment are generally delayed and the assessee is unable to correctly estimate, on the date of deposit, actual amount payable for any particular month or quarter, therefore, the BSNL had made the request to the Central Excise Authority for provisional payment of service tax.
• The permission for provisional assessment was granted the month of March 2007. The BSNL had further applied permission for provisional payment for the year 2008-09 for which no reply was given by the Central Excise Department.
• A show cause notice was issued to the appellant by the Commissioner of Central Excise, Ludhiana dated 05.06.2008 alleging short payment of Rs. 52,13,251/- under Section 73 of the Finance Act and interest under Section 75, penalty under Section 76 and 78.

Issue – 

• Whether there a short payment of service tax?

Order – 

• The Tribunal observed that when the payment is made on provisional basis the amount sometime is paid in excess and sometimes it may be less. The appellant has submitted the copy of the chart showing the payment made in excess during the relevant period which clearly shows that the appellant had adjusted the excess amount paid in a particular month against the liability of the subsequent month.
• Further it was observed that it is not the case of short payment in any case, but it is only an adjustment of excess amount already paid by the BSNL and hence there is no revenue loss to the department by way of adjustment nor the BSNL got undue advantage.
• Further, in the appellant’s own case for the subsequent period, the Commissioner (appeals) has allowed the appeal of the appellant by setting aside the order passed by the lower authorities on the same facts and the department has not filed any appeal against the same and the orders of the Commissioner in the appellant’s own case has attained finality.
• Hence demand of interest and penalty is concerned when the demand of tax itself is not sustainable, the demand of interest and imposition of penalty does not survive.