9911796707
TMI Blog2019 (3) TMI 1509X X X X Extracts X X X X X X X X Extracts X X X X ..... dates it becomes belated payment. As per section 75 of Finance Act, 1994, liability to pay interest follows in case of belated payment or short-payment of service tax. Merely because there is some balance lying unutilized in the CENVAT account, it cannot be said that the assessee has discharged the liability to pay service tax. The liability to pay service tax will stand discharged only when such payment is made or manifested in the records - The liability to pay service tax will stand discharged only when such payment is made or manifested in the records. Until such payment, or manifestation in the accounts, the assessee is liable to pay interest on the amount of tax. Section 75 does not state that when there is sufficient balance in the CENVAT account and if utilized for payment of service ax, the assessee need not pay any interest - the claim of the assessee that they are not liable to pay interest when the tax amount is adjusted from credit lying in CENVAT account is without any legal basis. In the case of Nicholas Piramal (India) Ltd. (supra), the issue analysed was whether interest is liable to be paid on differential amount when there is credit available and whether penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - for the period February 2009 to October 2010 and for subsequent periods. The appellant paid up differential duty amount of ₹ 5,40,45,243/- along with interest of ₹ 94,77,331/- by way of cash and the balance of ₹ 5,60,58,092/- was paid by adjustment from the CENVAT account. The appellants were availing the benefit of Notification 1/2006 and therefore had unutilized CENVAT credit. They did not pay the interest for the amount of ₹ 5,60,58,092/-, which they had adjusted from the CENVAT account. The department was of the view that they are liable to pay interest upon the service tax which was paid belatedly by adjustment of the CENVAT account also. Show cause notice dated 15.3.2014 was issued raising the demand of short-payment of service tax which was adjusted from the CENVAT account and demanding interest of ₹ 1,19,04,818/-. After due process of law, the original authority confirmed the demand of ₹ 5,60,58,092/- and appropriated the amount already reflected in their ST-3 returns as having adjusted towards the liability. The demand of interest of ₹ 1,19,04,818/- pertaining to the period from February 2009 to March 2012 on the above demand was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable to pay tax and subsequently started paying the tax under the construction of complex service once the benefit of the circular was withdrawn through the amendment notified through Finance Act, 2010 and that too by foregoing the benefit of input service tax credit on account of their adopting to pay the tax by availing notification benefit 1/2006-ST and which duty payment was more than tax liable to be paid by them under WCS (compounded rate) with the additional benefit of input service tax credit should also stand against the invocation of the extended period. 2.5 All the activities of the appellant were in the knowledge of the department and they also complied with the differential tax payment immediately on being advised even though they could have claimed the benefit of Board circular till June 2010 and in spite of the same the show cause notice was issued to them restricting it to the demand for the input service tax credit taken and adjusted by allowing the said adjusment clearly showing the intention of the revenue to demand interest on the input service tax credit permitted and therefore also the extended period invoked in the notice is not sustainable. 2.6 The s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order. He pointed out that the appellant had paid part of the demand to the tune of ₹ 5,40,45,243/- by way of cash and for this cash payment, the appellant had paid interest of ₹ 94,77,331/-. Though the appellant has adjusted ₹ 5,60,58,092/-, the same was informed by a letter dated 23.3.2012 and payment was not accompanied by interest. Whenever the tax is paid by adjustment from the CENVAT credit account, the appellant has to pay the interest that follows the tax demand. Admittedly, there is a delay in payment of service tax. The appellant is therefore bound to pay the demand of interest of ₹ 1,19,04,818/-. The demand confirmed is therefore legal and proper. 4. Heard both sides. 5.1 The ld. counsel is contesting the demand of interest and penalty imposed. As per the adjudication order, though the demand of ₹ 5,60,58,092/- which has been paid by adjustment from the CENVAT account is also confirmed, the same is not contested by the appellant. The contention in the present appeal is only with regard to interest of ₹ 1,19,04,818/- and the equal penalty imposed. From the arguments advanced by the ld. counsel, it is his case that when ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the said judgment, it is seen that the Tribunal had relied upon the documentary proof produced before the Bench to hold that there was sufficient credit in the CENVAT account during the material period. It was also observed therein that short-levy was with regard to the clearances of goods to sister unit by adjustment in CENVAT account subsequent to merger of two units. The facts being entirely different, the said decision is of no assistance to the appellant. In the case of Steer Engineering Pvt. Ltd. (supra), the facts was that demand of interest being after reversal of CENVAT credit when credit was denied on the ground that imported machines were not used in relation to manufacture. As already pointed out, this is not a case of wrong credit availment. This is a case of utilization of CENVAT credit for discharge of service tax liability. The said decision is also not applicable to the facts of the present case. In the case of Nicholas Piramal (India) Ltd. (supra), the issue analysed was whether interest is liable to be paid on differential amount when there is credit available and whether penalty imposable. In the said case, credit was availed on inputs which was already rever ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
