2010 (12) TMI 492 - AT - Service Tax

Interest - The assessee paid service tax by way of debit in CENVAT credit amount and later on made good the error by making payment in cash - held that this is not a case of failure to make payment but only an adoption of an incorrect method for payment, and therefore, the provisions of Section 75 are not attracted against the assessees - Hence, the impugned order setting aside the liability of assessees to pay interest and reject the appeal.

Summary

The Appellate Tribunal CESTAT, Chennai upheld the order setting aside the demand of interest by the Commissioner (Appeals). The Tribunal ruled that the assessee's case did not fall under Section 75 of the Finance Act, 1994, as it was not a failure to make payment but an incorrect method of payment. Therefore, the liability to pay interest was rejected, and the appeal by the Revenue was dismissed.