Cheque tender under an operative circular counts as payment on the date of deposit, defeating delayed-payment interest.

Valid cheque tendered to the authorised bank on the due date was treated as payment on that date under the applicable service tax circular, provided the cheque was not dishonoured. Because the circular remained in force during the relevant period, later credit of the amount into the Government account did not make the payment delayed. Interest for delayed payment was therefore not chargeable on the basis of the later clearance date, and the claim for interest was rejected.

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Issues: Whether service tax paid by cheque on the due date, but credited to the Government account after a few days, attracted interest for delayed payment.

Analysis: The respondent deposited the cheque in the authorised bank on the due date. A circular issued by the Directorate of Service Tax clarified that Government dues tendered by cheque to the authorised banker would be treated as paid on the date the cheque was handed over, provided it was not dishonoured. The circular was in force during the relevant period and was withdrawn only later. On that basis, the payment could not be treated as delayed for the purpose of charging interest.

Conclusion: The claim for interest was rejected and the appeal failed.

Final Conclusion: The order affirms that, for the relevant period, tender of a valid cheque to the authorised bank constituted payment on the date of tender under the applicable circular, so no interest was payable.

Ratio Decidendi: Where an operative circular deems Government dues paid by cheque to be paid on the date of tender to the authorised banker, and the cheque is not dishonoured, the payment cannot be treated as delayed merely because clearance into the Government account occurs later.

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