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TMI Blog2019 (3) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... hich the delay was occasioned, ie: the number of days or when exceeding 30 days, a month and the additional delay occasioned again calculated on the basis of days and so on and so forth. In the present case, the levy was made for the entire month, despite the delay being only for certain days spreading over two months, but not exceeding 30 days. We find the said levy to be improper and not sanctioned by the Statute. The aforesaid Circular was in the context of the officers levying interest for two months, when the number of days delayed spread over more than one month. That is, when the payment had to be made on the 25th of the next month, if it is made on the 3rd or 4th of the next subsequent month, the officers used to levy two months' interest, which the Commissionerate found to be not proper; rightly so. The Commissionerate then directed that in such cases, interest should be charged for only one month; which however is not sanctioned by the Statute, which speaks of the period of delay ie: the month or part of month in which the delay occurred - The arbitrary levy by the officers was sought to be mitigated by the Circular; which again permitted the levy for a period i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy of interest, which has been made on a monthly basis without reference to the actual days of delay occasioned. In many cases, there were split up remittances made, a portion before the due date and the balance after the due date. Therein also in computing the interest levy, it was levied on the total amount due and calculating the same for the whole month in which the delay occasioned without reference to the number of actual delay occasioned, calculated in days. 3. The questions of law raised, as reframed by us, are as follows: i) Whether the Tribunal was correct in having confirmed the order of the Commissioner levying interest for the entire month in which the delay was caused, without reference to the actual period of delay ? ii)Whether the interest levy could be made on the full amount of tax due when actually a portion of the amount was paid within the due date ? iii)Whether the time for payment taken by the DOT to the Central Excise Department can be deemed a delay for which interest levy is made under Section 75 ? 4. We have heard Smt.S.K.Devi, learned Counsel appearing for the appellant and Sri.Thomas Mathew Nellimoottil, learned Standing Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y part therefore is delayed. By Finance Act, 1998 the same was amended and it stood as herein below: 75.Interest on delayed payment of service tax:- Every person, liable to pay the tax in accordance with the provisions of section 68 or rules made thereunder, who fails to credit the tax or any part thereof to the account of the Central Government within the period prescribed, shall pay simple interest {at the rate of one and on e -half per cent for every month or part of the month} by which such crediting of the tax or any part thereof is delayed. 9. By Finance Act, 2001, the bracketed portion stood amended as at the rate of twenty-four per cent per annum for the period . Again, by amendment made by Finance Act, 2002 with effect from 16.08.2002, the rate of interest stood changed as fifteen per cent per annum . This remained upto 09.09.2004, which covers the period we are concerned with. 10. What has to be noticed is that from 1998 onwards, the rate of interest was to be applied either for every month or part of the month or for the period by which such crediting of the tax or any part thereof is delayed. This indicates that merely on a delay havi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atute, which speaks of the period of delay ie: the month or part of month in which the delay occurred. Even when the rate was specified per annum, the provision remains the same since the rate per annum has to be applied for the period by which the remittance was delayed. If it is on the basis of the aforesaid Circular, that the levy has been made for one month, understanding the statutory prescription to be levy for the entire month in which the delay was occasioned, without reference to the actual period of delay; we cannot but find it to be totally erroneous. The arbitrary levy by the officers was sought to be mitigated by the Circular; which again permitted the levy for a period in excess of that prescribed by the Statute. The Commissionerate cannot issue a Circular against the specific provisions of the Statute. 14. On the second question also, we find that the interest levy on delay being occasioned can only be on the delayed payments and not on the entire payments due in a particular month. If a portion of the dues have been paid prior to the due date, then necessarily the said portion would be deemed as having been deposited within time and there could be no levy under S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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