Tribunal sets aside penalty for non-transfer of Service Tax, citing accounting issues.

The Tribunal ruled in favor of the appellants, setting aside the imposition of penalty and interest for non-transfer of Service Tax amounts. It was established that the delay was due to accounting problems, not the fault of the appellants, who followed rules for tax deposit. The decision was based on a previous judgment in the appellants' favor, concluding there was no delay in depositing the tax as per rules. The appeal was allowed, providing consequential relief, if any.

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Issues:
1. Imposition of interest and penalty for non-transfer of Service Tax deposited by the appellants to the Commissioner, Service Tax.

Analysis:
The appeal in question arises from an Order-in-Appeal where interest and penalty were imposed on the appellants for not transferring the Service Tax deposited to the Commissioner, Service Tax. The appellants argued that they followed the rules outlined in the P and T Financial Hand Book and Telecom Manual, and there was no delay in depositing the tax as they were to recover it from their customers and deposit it accordingly.

The counsel for the appellants highlighted that a similar issue had been decided in their favor in a previous case by the President's Bench, where it was held that the delay in transferring the amount was due to accounting problems and not the fault of the appellants. The Bench accepted the appeal based on the ratio of the previous judgment, setting aside the penalty and interest.

Upon careful consideration, the Tribunal noted that the issue was covered in the assessee's favor by the cited judgment in their own case. It was established that there was no delay in depositing the amounts by the assessee as per the rules, and any delay in transfer was not their fault. Consequently, the impugned order imposing penalty and interest was set aside based on the cited judgment. The appeal was allowed with consequential relief, if any.

In conclusion, the Tribunal ruled in favor of the appellants, setting aside the imposition of penalty and interest as there was no fault on their part regarding the transfer of the Service Tax amounts, as established by the previous judgments in their own case.

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