2008 (9) TMI 267 - AT - Service Tax

Quantum of interest appellant states that there are some obvious arithmetical errors in the calculation on account of which the amount of Rs. 2.29 Crores indicated as payable has to be reduced by about Rs. 1.00 Crore Revenue states that there are no arithmetical errors as the date of realisation of the cheque is the date of actual payment of duty and accordingly, the interest has been calculated - even though the interest amount calculated may have to be reduced by taking into account the actual date of cheque issued, there is no case for complete waiver of pre-deposit. stay granted partly

Summary

Issues:
1. Restoration of appeal and stay petition
2. Quantified amount of interest calculation
3. Payment of service tax by M/s. BSNL
4. Predeposit amount determination

Analysis:

Issue 1: Restoration of appeal and stay petition
The appellant obtained clearance from the COD to pursue the appeal before the Tribunal. The Tribunal allowed the miscellaneous application for restoration of the appeal, recalling the earlier Order of dismissal dated 23-10-07 and restoring the stay petition and appeal to their original numbers.

Issue 2: Quantified amount of interest calculation
The appellant's advocate pointed out arithmetical errors in the interest calculation, requesting a reduction of about Rs. 1.00 Crore from the payable amount of Rs. 2.29 Crores. The appellant sought a waiver of the entire interest amount pending the appeal. However, as the appellant, M/s. BSNL, is a Public Sector Unit, no financial hardship plea was made. The Tribunal considered the submissions and directed the appellant to predeposit an amount of Rs. 80.00 lakhs within four weeks, with the balance amount waived during the appeal's pendency.

Issue 3: Payment of service tax by M/s. BSNL
The Department referred to a Service Tax Circular clarifying that M/s. BSNL, as a corporate entity, was not allowed to pay service tax by book transfer. Instead, M/s. BSNL was required to pay service tax along with interest and penalty, if any, under TR-6 Challans. The Department supported the impugned order, stating that interest calculation was accurate based on the date of cheque realization.

Issue 4: Predeposit amount determination
After hearing both sides, the Tribunal acknowledged the need to adjust the interest amount calculation based on the actual date of the cheque issued by M/s. BSNL. Despite potential reductions, the Tribunal ruled that there was no basis for a complete waiver of predeposit. The appellants were directed to predeposit Rs. 80.00 lakhs within four weeks and report compliance by a specified date, with the balance amount waived during the appeal's pendency.