2015 (5) TMI 948 - AT - Service Tax

Interest u/s 75 - delayed payment of service tax - Equivalent penalty for non-payment of interest - Held that - Jurisdictional authority has worked out the actual number of days delayed for payment of service tax for each amount received from August, 2004 to December, 2004 and he has also worked out the number of days of delay which varies from 150 to 28 days and the total interest amount payable was quantified as ₹ 73,369 - amount re-quantified by the department is the correct interest amount payable for the delayed payment of service tax. Therefore, there is no infirmity in the impugned order directing the adjudicating authority to re-quantify the interest. Further, I do not find any valid ground put forth by the Revenue against dropping of penalty by the Commissioner (Appeals). The lower appellate authority has waived the penalty taking into consideration of the fact that the respondent has already paid the service tax. Considering the interest amount itself is reduced from ₹ 1,33,004/- to ₹ 73,369/-, I do not find any infirmity in the impugned order in so far as setting aside the penalty. Accordingly, revised interest amount of ₹ 73,369/- worked out by the department as per the direction of the Commissioner (Appeals) is upheld and waiver of penalty is upheld - Decided against Revenue.

Summary

Issues:
Appeal against penalty under Section 76 of Finance Act, 1994.

Analysis:
The Revenue filed an appeal against the Commissioner (Appeals) order, challenging the penalty imposed under Section 76 of the Finance Act, 1994. The appellate authority upheld the interest demanded but directed the lower authority to re-quantify the interest based on the actual date of receipt of service tax and the number of days of delay. The Ld. AR presented a letter from the Commissioner of Central Excise, Tirunelveli, which detailed the interest payable as per the direction of the Commissioner (Appeals). The interest amount was reworked by the jurisdictional authority, ranging from 150 to 28 days of delay, totaling to Rs. 73,369. The appellate authority found no infirmity in the re-quantification of interest, affirming it as the correct amount due for delayed payment. Additionally, the penalty imposed was waived by the lower appellate authority due to the respondent's payment of service tax. With the interest amount being reduced and no valid grounds presented by the Revenue against the penalty waiver, the impugned order was upheld, dismissing the Revenue's appeal.

This judgment primarily addresses the re-quantification of interest for delayed service tax payment and the waiver of penalty by the lower appellate authority. The decision emphasizes the correctness of the reworked interest amount based on the actual days of delay, as determined by the jurisdictional authority. It also highlights the rationale behind the penalty waiver, considering the respondent's payment of service tax and the reduced interest amount. The judgment underscores the importance of accurate calculations and justifications for financial penalties in tax-related matters, ultimately leading to the dismissal of the Revenue's appeal.