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Issues involved: Appeal challenging order for interest on delayed service tax payment.
Summary: 1. The appeal was filed by the General Manager Telecom BSNL, Amritsar against an order demanding interest on delayed service tax payment. The Commissioner (Appeals) upheld the demand, stating that even though the service tax was being paid daily, delay in crediting it to the Central Government's account made the appellant liable for interest. 2. The appellant argued that they followed the prescribed procedure for payment, which involved sending statements to reconcile telephone charges and service tax. A circular in 1998 allowed direct payment of service tax, eliminating delays. The appellant contended that post-1999, there was no delay in making the book entry for service tax payment. 3. The appellant cited similar cases where interest demands were dropped based on explanations provided. They highlighted that the same Commissioner (Appeals) had accepted identical contentions in previous cases, indicating inconsistency in decisions. 4. The Departmental Representative argued that the liability to pay interest under Section 75 of the Finance Act, 1994 is mandatory, regardless of past decisions. Payment must be credited to the Central Government's account under the specified head for it to be considered made. 5. The Tribunal noted that the appellant, a Central Government department, followed prescribed procedures until 1999. Due to a circular in 1998, direct crediting of service tax was implemented, eliminating delays. Considering the unique circumstances where the delay was due to following approved procedures and daily deposits to the Central Government's account, the Tribunal set aside the order for interest payment. This judgment emphasizes the importance of adherence to prescribed procedures and the impact of circulars on payment processes, ultimately leading to the decision to relieve the appellant from the liability to pay interest on delayed service tax payment.
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