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Interest
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Posted on 23-07-2006 00:13
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Posts: 129
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Interest is payable even if the assessee pays up a time barred demand [TCP Ltd. v. CCE (2006) 1 STR 134 (Tri-Chennai).
Retrospective legislation – Interest not leviable - Where the services of the appellants, a broadcasting agency were brought into the service tax net w.e.f. 16.7.2001, by retrospective legislation viz., Finance Act, 2002 the Supreme Court held that interest cannot be demanded retrospectively. In any case, the Court observed, section 148 of the Finance Act, 2002 which retrospectively validated the provisions of the service tax law clearly stated that interest was payable only if the assessee did not pay service tax on their services until 30 days from 11.5.2002 (date of assent of the Finance Bill, 2002) and hence the liability to pay interest would arise only if payment is not made after the said period. [Star India Pvt. Ltd. v. CCE (2006) 1 STR 73 (SC) See also CCE v. Bharat Steel Rolling Mills (2006) 1 STR 83 (Tri-Del.) |
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Posted on 23-07-2006 00:18
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Posts: 129
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Where the Madras High Court dismissed the writ petition challenging the imposition of service tax on chartered accountants and permitted the petitioners to pay their taxes by 20-12-2000, the Tribunal held that no interest is payable during the period of stay since there was no effective provision of law authorising the levy of service tax. [Suri & Co. vs. CCE (2006) 1 STR 31 (Tri-Chennai) See contra CCE, Mumbai-IV vs. R.K.Swamy BBDO Advertising Pvt. Ltd. (2005) 186 E.L.T. 291 (Tri-Mum)]. |
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Posted on 23-07-2006 01:08
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Super Administrator
Posts: 129
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In this case service tax for July, 1997 was paid on 2nd day of September, 1997 thus there was delay of 18 days since the due date was 15th day of August, 1997 and similarly there were several such delays. Interest u/s 75 was chargeable at the rate of 1.5% "for every month or part of a month by which such crediting of the tax or any part thereof is delayed". The issue here was whether interest is payable only for the period of delay or for all the months comprising the delay ? Following the decision of Lamina Suspension Products (P) Ltd. vs. State of Andhra Pradesh (1990) 78 STC 429 (Andhra Pradesh) in the context of Andhra Pradhesh General Sales Tax Act, 1957 the Tribunal held that interest would be payable only for the actual period of delay (i.e., 18 days) and not for the all the months comprising the delay.
BPL Mobile Cellular ltd. vs. CCE, Coimbatore (2005) 183 ELT 324 (Tri-Chennai) |
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Posted on 23-07-2006 01:09
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Posts: 129
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Penalty u/s 76 and u/s 77 aggregating to Rs. 3,07,000 was reduced to Rs. 50,000/- since the delay in payment of tax and filing of return arose due to genuine problems inasmuch as there was a strike of the employees which prevented the management from functioning.
First Flight Couriers Ltd. vs. CCE Banglore (2005) 183 ELT 51 (Tri-Bang.) |
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Posted on 23-07-2006 01:12
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Posts: 129
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Oriental Insurance Co. Ltd. vs. CCE, New Delhi [(2005) 182 ELT 463 (Tri-Del.)]
Where the appellants had asked for provisional assessment for the period April, 1997 to March, 2000 and paid excess service tax for some period and short payment in some period the Tribunal held that the excess payment has to be first adjusted against the shortfall for the purpose of computation of demand on finalisation of assessment. Further, since the rules governing provisional assessement provides for payment of interest only from 1.7.2001, no interest was payable for the period under dispute. |
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Posted on 23-07-2006 01:14
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CCE, Rajkot vs. J. K. Gori Associates [(2005) 182 ELT 502 (Tri-Mum.)]
Where the Gujarat High Court dismissed the writ petition challenging the imposition of service tax on chartered accountants and permitted the petitioners to pay their taxes by 28.2.2001, the Tribunal held that no interest is chargeable if service tax was paid within the period allowed by the High Court. |
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Posted on 23-07-2006 01:20
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Commissioner of C. Ex., Pune - I vs. Dhariwal Tobacco Products Ltd. (2005) 180 ELT 451 (Tri. - Mumbai)
Interest u/s. 11AB of the Central Excise Act in case of provisional assessment under Rule 6(4) of the Service Tax Rules, 1994 will come into force only when the assessment is finalized.
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Posted on 23-07-2006 01:22
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Super Administrator
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Shree Vadivambigai Textile Mills Ltd. vs. CCE (2005) 179 ELT 151 (Tri-Chennai)
Interest under section 75 is mandatory and no leniency can be shown on account of the fact that the company is a BIFR company. |
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