2021 (8) TMI 654 - AT - Service Tax

Seeking adjustment/appropriation of excess tax paid against net amount of interest payable - Penalty u/s 76 of FA - HELD THAT - In the impugned order, the learned Commissioner has confirmed the demand of interest of ₹ 8,94,092/- under Section 75 of the Finance Act and on re-quantification, the Department itself has come to the amount of ₹ 7,22,523/- which is also incorrect as per the appellant because the interest has been calculated on a wrong amount as stated by the appellant. Hence, there is a divergence of opinion between the appellant and the Department regarding the quantification of the interest. The interest needs to be re-quantified again by the Department as per the statements made by the learned Counsel for the appellant. For this purpose, the matter is remanded back again to the Assistant Commissioner for re-quantification of the interest payable under Section 75 - Appeal allowed by way of remand.

Summary

Issues:
1. Appeal against order demanding service tax, interest, and penalties.
2. Correct quantification of service tax, interest, and penalties by the Principal Commissioner.
3. Delay in re-quantification by the Commissioner.
4. Discrepancies in the calculation of interest and penalties.
5. Justification for penalty imposition.
6. Divergence of opinion between the Department and the appellant on interest quantification.

Analysis:
1. The appeal was against an order demanding service tax, interest, and penalties for construction works. The appellants believed certain works were not liable for service tax. The Tribunal dropped the demand for most works except for one, and also modified penalties. The case was remanded to quantify the payable amounts.

2. The Principal Commissioner re-quantified the amounts, appropriating already paid sums. The appellant disputed the calculations, claiming errors in interest and penalties. The Commissioner imposed penalties for suppression of facts and contravention of tax rules.

3. The appellant challenged the delay in re-quantification by the Commissioner, exceeding the Tribunal's timeline. The Commissioner's order was questioned for appropriating amounts already paid and for factual inaccuracies in quantification.

4. Discrepancies arose in the calculation of interest and penalties. The appellant argued that interest was wrongly calculated, and the penalty was unjustified due to the already paid service tax. The Department defended its calculations but acknowledged errors in interest quantification.

5. The imposition of penalties was defended by the Department, citing the Tribunal's directions. The appellant contended that penalties were not justified due to the timely payment of the confirmed service tax amount.

6. A divergence of opinion on interest quantification was noted between the Department and the appellant. The Commissioner's calculation of interest was disputed, leading to a need for re-quantification. The matter was remanded for a reassessment of interest amounts within a specified timeline.