2019 (1) TMI 320 – CESTAT NEW DELHI – TMI – Interest on Delayed payment of service tax – payment of tax made before issuance of SCN – amendment in Section 80 of the Finance Act, 1944 – time limitation – Held that:- Section 80 of the Finance Act, 1944 makes it clear that once the payment has been made before the issuance of Show Cause Notice no question of any penalty nor of interest at all arises – The payment in the present case was made after the said amendment but before the issuance of Show Cause Notice. No doubt the payment is for the period prior the said amendment but since the amendment is beneficial in nature, retrospect effect can be given to the said amendment. Therefore, no question of imposition of penalty at all arises.
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Time limitation – Held that:- SCN is apparently beyond the normal period of one year. There is the apparent acknowledgment on the part of the Adjudicating Authority about the decision of Delhi High Court as has been impressed upon by the appellant.
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the appellant had made delayed payment of service tax for the period w.e.f. April 2008 to September 2012. However, no interest was paid on the said delayed payment. Accordingly, a Show Cause Notice No. 10060 dated 01.08.2014 was served upon the appellants proposing the recovery for ₹ 2,87,881/- as an interest to be paid on delayed payment of service tax. In view of Section 75 of the Finance Act, the said proposal was initially confirmed by the Order of Assistant Commissioner No. 498 dated 27.01.2016. Being aggrieved, an appeal before the Commissioner (Appeals) was filed who vide the Order under challenge has upheld the findings. 2. I have heard Mr. Chirag Jain, Ld. CA for the appellant and Mr. P.R. Gupta, Ld. DR for the Department. 3. It is submitted by the appellant that out of the entire disputed period service tax for the period w.e.f. April 2008 to March 2009 and for the period April 2012 to September 2012 has been paid well in time and Department itself has not levied any in
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been issued on 19.08.2014 is very much beyond the one year period as is prescribed for the issuance thereof. It is submitted that in view of the reason mentioned above there was no intention of the appellant to evade the duty. Department was not entitled to invoke the extended period of limitation. The Show Cause notice is alleged by barred by time. Ld. Counsel has relied upon the decision of inclusion of Quality Ice Cream Co. Vs. Union of India 2012(27) S.T.R. 8(Delhi) submitting that where the period of limitation prescribed for claim of principal amount has expired, the time barred demand cannot apply to the claim even for interest therein. It is mentioned that the Adjudicating Authority below has ignored the said decision. The Order is prayed to be set aside and Appeal is prayed to be allowed. 4. Per contra, while rebutting these arguments, Ld. DR has justified the impugned order. Para 5.7 thereof is impressed upon submitting that as per Section 75 it is mandatory for the assessee/
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n made in time. (ii) With respect to the remaining period of April, 2009 to March, 2012 the same could not be deposited due to not being received from tenants in view of Delhi High Court decision as above. However, the full tax was deposited by the appellant before the issuance of the Show Cause Notice. I observed that there has been an amendment in Section 80 of the Finance Act, 1944 vide which sub-Section 2 thereof was inserted which reads as follows:- I find that an amendment in Section 80 was made by inserting sub-section (2), which provides that Notwithstanding anything contained in the provisions of section 76 or Section 77 or Section 78, no penalty shall be imposable for failure to pay service tax payable, as on the 6th day of March, 2012, on the taxable service – referred to in sub-clause (zzzz) of clause (105) of Section 65, subject to the condition that the amount of service tax along with interest is paid in full within a period of six months from the date on which the Finan
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nt. In the given circumstances, the non-payment was actually due to the said prevalent confusion. There is nothing on record which may be considered as an evidence qua positive act of the appellant of having an intention to evade the duty for the said period. Once there is no such intention apparent, Department was not entitled to invoke proviso to Section 73 of Central Excise Act, 1944. Show Cause Notice is definitely barred by time. In accordance of the decision of Quality Icecream (supra) I am of the opinion that once the main claim is barred by time, the claim of interest thereupon has no more sustainability. The decision as relied upon by the Department is not applicable to the facts and circumstances because no doubt as per Section 75, interest is mandatory but recovering the same beyond the period of limitation no more retains the character of it being compensatory in nature rather it acquires the character of penalty which can be leviable only in case of deliberate violation of
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