2013 (1) TMI 379 - AT - Service Tax

Recovery of interest - Commissioner(Appeals) has directed that interest should be charged only w.e.f. 05.04.2008 even though PAN based Service Tax registration was granted to the Appellant from 12.05.2008 - Held that - As before the Commissioner(Appeals), no argument was advanced citing the provisions of law now mentioned in the grounds of appeal by the department, and as there was no Show Cause Notice issued by the Appellant directing payment of interest for the month of February, 2008 and March, 2008, except a remark by the assessing officer, thus the Commissioner(Appeal) has no occasion to refer and record his finding on the relevant provisions. In these circumstances it is necessary that the case be remanded to Commissioner(Appeals) to which the A.R. has no objection. The department is free to raise all the grounds now raised before this Tribunal and the Commissioner(Appeals) is directed to consider the said grounds and decide the issue afresh with a reasonable opportunity be afforded to both sides. Appeal of the Revenue is allowed by way of remand.

Summary

Issues:
- Appeal against Order-in-Appeal directing recovery of interest from a specific date instead of delays recorded by assessing officer.
- Interpretation of Rule 6 of Service Tax Rules, 1994.
- Lack of Show Cause Notice for payment of interest.
- Remand to Commissioner(Appeals) for reconsideration of grounds raised by the department.

Analysis:
The appeal before the Appellate Tribunal CESTAT Kolkata involved a dispute regarding the recovery of interest in a case where the Commissioner of Central Excise(Appeals) had directed interest to be charged from a specific date rather than the delays recorded by the assessing officer. The Ld.A.R. for the Revenue argued that the Commissioner's decision was based on the late supply of PAN-based registration to the Respondent, resulting in a different starting point for calculating interest. However, it was noted that the Commissioner had not provided a detailed finding on the relevant provisions of law, particularly Rule 6 of the Service Tax Rules, 1994. The Ld.A.R. acknowledged the absence of a Show Cause Notice on the matter before the Commissioner.

Upon reviewing the submissions and the record, the Tribunal found that the arguments related to the provisions of law were not raised before the Commissioner during the initial proceedings. As there was no Show Cause Notice specifically directing the payment of interest for the relevant period, the Commissioner had not addressed these legal grounds in the original decision. Consequently, the Tribunal decided to remand the case back to the Commissioner for reconsideration. The department was permitted to raise all the grounds before the Commissioner, who was directed to review the case afresh, providing both parties with a reasonable opportunity to present their arguments. Ultimately, the appeal of the Revenue was allowed by way of remand, emphasizing the need for a comprehensive reconsideration of the issue by the Commissioner.