2015 (12) TMI 83 - AT - Service Tax

Waiver of pre deposit - demand of interest on delayed payment of service tax - Held that - Applicants discharged finally their service tax liability for the relevant period, only in August, 2007, which has not been disputed, at any point of time, by the applicant. The difficulty mentioned by the applicant in not discharging the service tax liability, is due to non-availability of relevant data for determining the correct Service Tax liability which is clear from the finding of the Ld. Commr. (Appeal). On the other hand, prima facie, demand for recovery of interest is not barred by limitation and there is no invoking of suppression of facts, mis-statement and mis-declaration etc. for recovery of the outstanding dues. We do not find substance in the argument of the Ld. Consultant that in such cases, the interest is not liable to be paid under Section 75 of the Finance Act, 1994 being barred by limitation as held by the Hon ble Delhi High Court in Kwality Ice Cream case (2012 (1) TMI 88 - Delhi High Court ). - Partial stay granted.

Summary

Issues: Application for waiver of pre-deposit of interest under Section 75 of the Finance Act, 1994.

Analysis:
1. The petitioner, a public sector undertaking, sought waiver of pre-deposit of interest amounting to Rs. 1,33,31,419 confirmed under Section 75 of the Finance Act, 1994 for services rendered during April 2005 to March 2007.

2. The petitioner's consultant argued that the delay in payment of service tax was due to mis-calculation of liability and non-availability of documents, leading to the payment of the entire service tax amount in August 2007. Reference was made to a judgment of the Hon'ble Delhi High Court to support the contention that the demand notice issued for interest in June 2008 was time-barred.

3. The Revenue's representative contended that the judgment cited by the petitioner was not applicable, emphasizing that the service tax payments were made provisionally due to non-availability of data, and the final payment was made in August 2007. It was argued that there was no dispute regarding the liability of service tax, making Section 75 of the Finance Act, 1994 applicable for interest recovery.

4. After considering both arguments, the tribunal noted that the petitioner finalized their service tax liability in August 2007 due to data unavailability. The tribunal found no merit in the argument that interest payment was barred by limitation, as there was no suppression of facts. Consequently, the tribunal directed the petitioner to deposit 50% of the confirmed amount within eight weeks, with the balance dues waived upon compliance, and recovery stayed during the appeal process.