2005 (4) TMI 343 - AT - Service Tax

Summary

Issues:
1. Liability for payment of interest on Service tax during the period covered by a stay order.

Analysis:
The case involved a dispute regarding the liability for payment of interest on Service tax during a period when a stay order was in effect. The respondents, advertising agents, were members of the Advertising Club at Chennai, which had filed a writ petition challenging the levy of Service tax on advertising. The High Court initially granted an interim stay on the levy, which was later vacated. During the period of the stay order, the appellants paid the Service tax for the relevant period. However, the Superintendent of Service Tax assessed interest amounting to approximately Rs. 13,61,000 for the delay in payment. The Commissioner (Appeals) accepted the respondents' contention that the Service tax for the period in question was covered by the stay but became payable after the stay order was vacated. The Revenue, in appeal against the Commissioner's order, argued that interest was payable for the entire period, including the period covered by the stay order.

The Revenue contended that there was no specific waiver from payment of interest during the period of the stay order and that the respondents were not parties to the writ petitions before the High Court. The Revenue sought restoration of the Superintendent's order levying interest for the entire period of delay. The Counsel for the respondents opposed the Revenue's prayer, relying on the Commissioner (Appeals) order.

Upon careful consideration of the arguments, the Tribunal found merit in the Revenue's contention that interest was payable for the entire period of delay in the absence of a specific order from the High Court to exclude the period covered by the stay order for calculating the delay. Consequently, the Tribunal set aside the Commissioner's order and allowed the appeals of the Revenue. The judgment clarified the liability for payment of interest on Service tax during the period of a stay order, emphasizing the absence of a specific directive to exclude the stay period for calculating the delay in payment.