Kyal Trading Pvt Ltd Versus Commissioner of GST Mumbai-V
Service Tax
2019 (2) TMI 1492 – CESTAT MUMBAI – TMI
CESTAT MUMBAI – AT
Dated:- 13-2-2019
APPEAL NO: ST/87617/2018 – A/85291/2019
Service Tax
Shri Ajay Sharma, Member (Judicial)
Shri Tejal Patil, Advocate for Uber Legal for appellant
Shri O.M. Shivdikar, Assistant 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 M
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s Seventy three thousand Six hundred and Ninety eight only] at the rate applicable should not be recovered and demanded from them under provisions of Section 75 of the Finance Act 1994.
ii) Penalty should not be imposed on them under Section 76 and 78 of the Finance Act, 1994.
3. The adjudicating authority vide order-in-original dated 18/05/2016 confirmed the demand of interest of Rs. 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 Rs. 13,73,698/- to Rs. 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
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and confirmation of demand and Service Tax and appropriation of the amount paid as Service Tax was not warranted. So far as the liability to pay interest on delayed payment of Service Tax is concerned, I would like to reproduce Rule 6 of Service Tax Rules, 1994 and Rule 3(4) of CENVAT Credit Rules, 2004 which are as under.
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
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act payment of interest. I completely agree with the finding of the ld. Commissioner that in view of the law laid down by the Hon'ble Supreme Court in the matter of Union of India vs. Ind-Swift Laboratories Ltd. 2011 (265) E.L.T. 3 (S.C.) the defence put forth by the appellant is not tenable that since they had sufficient balance 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 d
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