2024 (3) TMI 921 - AT - Service Tax

Calculation of interest - it is alleged that calculation of interest was not done, when it was due and when it was paid - also alleged that interest calculated in a clubbed manner - HELD THAT - It is not disputed by the Revenue that in 2006, the appellant took registration themselves and started paying Service Tax on their activity. Moreover, the appellant was entitled for abatement of 50% of the Service Tax payable by them in terms of Notification No. 20/2004-S.T. dated 10.09.2004 and the appellant has not claimed abatement in terms of the said Notification, which shows that the appellant was bona fide in not discharging Service Tax initially and thus started paying Service Tax later on. Whatever amount was collected by the appellant from M/s. Tata Motors Ltd. has already been deposited with the Department. In the circumstances, no penalty is imposable on the appellant. Further, the appellant has disputed certain calculation of interest, which the appellant is ready to pay. For the purpose of calculation of interest, the matter is required to be remanded to the adjudicating authority. Therefore, the matter is remanded back to the adjudicating authority only for the purpose of calculation of interest. The appeal is disposed of by way of remand.

Summary

Issues involved: Appeal against confirmation of demand of Service Tax for outdoor catering service, imposition of penalty, and calculation of interest.

Summary:
The appellant appealed against the confirmation of demand of Service Tax for providing outdoor catering services to a company, where they had not paid Service Tax until 2006. Upon realizing their liability, the appellant registered and started paying Service Tax under the category of "outdoor catering service." An audit in 2008 revealed the underpayment from 2004 to 2008. The appellant, upon discussion with the client, paid the entire amount of Service Tax in 2008. A Show Cause Notice was issued in 2009, leading to the confirmation of the demand of Service Tax, interest, and imposition of penalties. The appellant disputed the calculation of interest and argued against the imposition of penalties due to lack of mens rea.

The Tribunal noted that the appellant voluntarily registered and started paying Service Tax in 2006, without claiming abatement they were entitled to, indicating good faith. The amount collected from the client was deposited with the Department. Considering these factors, the Tribunal held that no penalty was imposable on the appellant. However, the appellant's dispute regarding the calculation of interest was acknowledged. The matter was remanded back to the adjudicating authority solely for the purpose of recalculating the interest. The appellant and the authority were directed to collaborate on the interest calculation within 30 days from the date of the Order, with the appellant required to pay the recalculated interest within the subsequent 30 days.

Therefore, the appeal was disposed of by way of remand for the specific purpose of recalculating the interest amount, with no penalty imposed on the appellant due to their good faith actions in registering and paying Service Tax voluntarily.