2011 (5) TMI 810 - AT - Service Tax

Demand of interest is confirmed on the delayed payment of Service Tax Held that - petitioner shall be liable to interest in accordance with law for the delayed compliance with the statute from the date it becomes applicable, Appeals are dismissed

Summary

Issues:
- Appeal against demand of interest on delayed payment of Service Tax
- Interpretation of the order passed by the Hon'ble High Court at Calcutta regarding compliance with the statute and liability for interest
- Applicability of the decision in the case of M/s.N.C.Banerjee & Co. on the demand of interest

Analysis:
1. The Appeals were filed against orders confirming the demand of interest on delayed payment of Service Tax. The key contention was that the Hon'ble High Court at Calcutta had granted a stay during the pendency of a Writ Petition challenging the imposition of Service Tax and allowed the appellants 60 days to comply with the statute. The appellants argued that due to this stay and the granted time, the demand for interest was not sustainable.

2. The Revenue, however, relied on a decision by the Tribunal in a similar situation where the demand of interest was upheld. The Hon'ble High Court's order dated 22.05.2003 specified that while penal action was waived subject to compliance within 60 days, the petitioner would still be liable to pay interest for delayed compliance with the statute. The Tribunal also upheld the demand of interest in a comparable case, supporting the Revenue's stance.

3. The Tribunal found no merit in the appellant's contentions regarding the demand of interest, citing the High Court's order and the precedent set by the Tribunal in a similar case. Consequently, the Appeals were dismissed in this regard.

4. In a specific Appeal where a penalty under Section 75A of the Finance Act was imposed, the Tribunal noted that based on the High Court's order, the appellants were not liable for any penal action. Therefore, the penalty imposed was set aside for that particular case.

5. Ultimately, the Appeals were disposed of in accordance with the above findings, with the Tribunal pronouncing and dictating the judgment in open court.