2019 (2) TMI 1492 – CESTAT MUMBAI – TMI – Interest on delayed payment – case of appellant is that no demand has been raised in the show cause notice and there cannot be interest demand without any demand raised for the tax amount – Held that:- It is not disputed that the appellant admitted its liability of Service Tax on the amount over and above the MGM and paid the same before the issuance of show cause notice and due to which the show cause notice was issued for demand of interest only and confirmation of demand and Service Tax and appropriation of the amount paid as Service Tax was not warranted.
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Admittedly, there is delay in payment of Service Tax and once the duty is admitted, interest cannot be detached from the duty liability. The liability to pay interest arises when the assessee is liable to pay duty on the day which is prescribed but failed to pay the same. The liability to pay interest arises from the date, the duty is payable till the date it is paid. By such late p
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Commissioner (AR) for respondent ORDER The present appeal has been filed from the impugned order dated 01/03/2018 passed by the Commissioner, CGST & Central Excise, Thane Rural, Mumbai. The core of the dispute in this appeal is liability to pay interest on delayed payment. 2. The relevant facts are that the appellant had given space in their malls to various retailors/ persons who sold their goods by using the infrastructure of the mall/outlets. For using this facility, the retailors/persons had entered into Minimum Guarantee agreement with the Appellant, according to which they have to pay a fixed percentage of sales or a Minimum Guarantee Money (MGM) to the appellant. They had to ensure that the minimum amount of income is generated so that appellant gets a sufficient share. In case the minimum income was not generated, the person using the space had to pay the differential amount as MGM. In respect of the MGM charged and received by the Appellant they had paid Service Tax under
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ated 18/05/2016 confirmed the demand of interest of ₹ 13,73,698 and also imposed penalty under Section 78 ibid. On appeal filed by the appellant, the learned Commissioner reduced the interest liability from ₹ 13,73,698/- to ₹ 10,38,028/- and dropped the penalty under section 78 ibid. 4. I have heard Learned Counsel for Appellant and Learned Authorised Representative for the Revenue and perused the record. Learned Counsel for Appellant submitted that he is confining his arguments towards interest liability only and not challenging the Service Tax liability which has already been paid by the appellant. He further submitted that no demand has been raised in the show cause notice and there cannot be interest demand without any demand raised for the tax amount. He also submitted that the appellant always had unutilized balance lying in the CENVAT credit account and they have immediately reversed the credit on being pointed out by the Department and, therefore no interest i
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Rule 6 of Service Tax Rules, 1994 reads as under: "(l) The service tax shall be paid to the credit of the Central Government,- i) By the 6th day of the month, if the duty is deposited electronically through internet banking; and ii) By the 5th day of the month, in any other case, Immediately following the calendar month in which the payments are received, towards the value of taxable services: Provided also that the service tax on the value of taxable services received during the month of March, or the quarter ending in March, as the case may be, shall be paid to the credit of the Central Government by the 31st day of March of the calendar year." Rule 3(4) of Cenvat Credit Rules, 2004 reads as under: (4) The CENVAT credit may be utilized for payment of- (a) any duty of excise on any final product; or (b) an amount equal to CENVAT credit taken on capital goods if such capital goods are removed as such; or (d) an amount under sub-rule (2) of rule 16 of Central Excise Rules, 20
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lance in their Cenvat account at all time during the period of dispute, no interest is payable. In the aforesaid matter, the Hon'ble Supreme Court has had that Rule 14 of the Cenvat credit Rules, 2004 specifically provided that where Cenvat credit has been taken or utilized or has been erroneously refunded, the same along with interest would be recovered from the manufacturer or the provider of the output service. Therefore, on the happening of the any of the three aforesaid circumstance such credit becomes recoverable with interest. 6. Admittedly, there is delay in payment of Service Tax and once the duty is admitted, interest cannot be detached from the duty liability. The liability to pay interest arises when the assessee is liable to pay duty on the day which is prescribed but failed to pay the same. The liability to pay interest arises from the date, the duty is payable till the date it is paid. By such late payment or delayed payment, the Revenue is deprived of the duty. The
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