Can there be any demand of Interest on Late payment of Service Tax without Show Cause Notice

Facts of the Case:

the show cause notice dated 22-5-2000 issued to the appellant, the appellant was directed to show cause as to why the penalty should not be imposed upon them as provided under Sections 76 and 77 of Chapter V of the Finance Act, 1994 for contravention of provisions of Sections 68 and 70 respectively of Chapter V of the Finance Act, 1994.

Section 68 ibid deals with the payment of Service tax at the rate specified in Section 66 in such manner and within such period as may be prescribed.

There is no demand of interest under Section 75 in the show cause notice.

However, instead of imposing penalty under Section 76 for delayed payment of Service tax, the adjudicating authority has demanded interest of Rs. 1,30,067/- under Section 75 which was never proposed in the show cause notice.

Decision:

Accrual of interest is automatic and no separate notice was required to be served in that respect as such. 

(For text of Judgment - visit 2007 -TMI - 2251 - CESTAT, AHMEDABAD