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TMI Blog2019 (3) TMI 975X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case demanding interest under Section 75 is not tenable in law because the appellant is not liable to pay Service Tax under Section 68. The impugned order demanding interest in terms of Section 11AA of the Central Excise Act is not sustainable in law - appeal allowed - decided in favor of appellant. - ST/20254/2018-SM - Final Order No. 20268/2019 - Dated:- 14-3-2019 - MR. S.S GARG, JUDICIAL MEMBER Mr. S. Ananthan, CA For the Appellant Mr. K. Murali, Superintendent, AR For the Respondent ORDER Per: S.S GARG The present appeal is directed against the impugned order dated 01.12.2017 passed by the Commissioner (A) whereby the Commissioner (A) has partly allowed the appeal and confirmed the demand in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osing to impose penalty under Section 76. The appellant filed detailed reply to the SCN and submitted that they are performing the Government transactions and are not liable to pay Service Tax as they were acting as an agent of RBI and the services rendered by RBI was not liable to Service Tax as RBI is covered under the negative list and accordingly the services rendered by the appellant was also covered under the negative list. Further, the appellant relied upon the decision of the Larger Bench in the case of CCE Chandigarh v. State Bank of Patiala, 2016-TIOL-2849-CESTAT-DEL-LB. During the course of personal hearing, the appellant submitted that the Reserve Bank of India vide letter dated 04.11.2016 directed the banks to pay the Servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... negative list and since the appellants are the agent of RBI while performing the Government transactions therefore they are also not liable to pay Service Tax and is also covered under the negative list. He further submitted that as per the Larger Bench, they are not liable to pay Service Tax but since the RBI vide their letter dated 04.11.2016 has asked them to pay the Service Tax and seek reimbursement of the same from them. Therefore, in compliance with that direction, the appellant had remitted the Service Tax even before the same is collected from RBI. He also submitted that he has paid the Service Tax in compliance of Section 73A which provides that once an amount is collected as Service Tax, the same has to be deposited to the Gover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s paid the Service Tax in compliance of Section 73A(2). Further, I find that in the facts and circumstances of the case demanding interest under Section 75 is not tenable in law because the appellant is not liable to pay Service Tax under Section 68. Further, I note that the decision relied upon by the appellant in the case of Shree Infra Tech (supra) under almost similar circumstances, the Tribunal in Para 5 has held as under: I have considered submissions on both sides. I find merit in the argument of the counsel for the appellant. When the demand for main amount itself is not sustainable, demand for interest cannot be sustained for the reason that appellant had paid amount which was not legally due. Appellant should get relief at le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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