2005 (5) TMI 369 - AT - Service Tax

Summary

Issues:
Demand of interest on Service Tax for the period of default of tax.

Analysis:
The appeal before the Appellate Tribunal CESTAT, CHENNAI was concerning the demand of interest amounting to Rs. 6,199 on Service Tax for a specific period of default of tax. Despite the notice, there was no representation for the appellant during the proceedings. The appellant raised a ground against the demand of interest based on a Writ petition filed in the Madras High Court by Mandap-keepers Association, of which the appellant was a member. The High Court had initially granted a stay order in favor of the appellant, preventing the recovery of Service Tax. However, the court ultimately decided in favor of the Revenue. The date of dismissal of the Writ petition was not clear from the records. It was noted that the Service Tax for the disputed period was paid by the appellant post the dismissal of the Writ Petition. As per Section 76 of the Finance Act, 1994, the appellant was liable to pay interest on the defaulted Service Tax. The liability for interest only became operative from the date of dismissal of the Writ petition. Therefore, the appellant was held liable to pay interest on the defaulted Service Tax from the date of dismissal of the Writ petition to the date of tax payment. The original authority was directed to quantify the interest amount based on this determination, and the appellant was instructed to pay the specified amount as per the demand notice to be issued by the Department after the quantification. The appeal was disposed of accordingly.