2004 (10) TMI 5 - AT - Service Tax

CESTAT Upholds Interest Demands on Service Tax Amounts, Rejects Plea for Leniency

The Appellate Tribunal CESTAT (CHENNAI) upheld demands of interest on service tax amounts for specific periods under Section 75 of the Finance Act, 1994, ... Mandatory levy of interest on service tax under Section 75 of the Finance Act, 1994 - Non-availability of administrative leniency by reason of the assessee being declared sick by BIFRMandatory levy of interest on service tax under Section 75 of the Finance Act, 1994 - Non-availability of administrative leniency by reason of the assessee being declared sick by BIFR - Whether interest demanded under Section 75 is liable to be waived or relief given because the assessee-company was declared sick by the BIFR. - HELD THAT: - The Tribunal examined Section 75 and found the provision to be couched in mandatory language prescribing interest on service tax payable under the charging provision. The appellants did not contend that the amount of interest demanded exceeded the statutory prescription. The sole contention that the company's declaration as sick by the Board for Industrial and Financial Reconstruction warranted leniency was held not to alter the statutory mandate. In the absence of any excess or error in calculation, and given the mandatory nature of Section 75, there was no scope to remit or waive the statutory interest on the facts presented.Demand of interest under Section 75 is affirmed and the appeals are rejected; sickness declared by BIFR does not entitle the assessee to leniency from the statutory interest.Final Conclusion: The Tribunal affirmed the statutory interest demands for the periods 16-7-97 to 16-10-98 and 17-10-98 to 31-8-99 under Section 75 of the Finance Act, 1994 and dismissed the appeals; the assessee's BIFR sickness declaration did not justify remission of interest. The Appellate Tribunal CESTAT (CHENNAI) upheld demands of interest on service tax amounts of Rs. 41,917/- and Rs 20,400/- for specific periods under Section 75 of the Finance Act, 1994. The appellants' plea for leniency due to being declared sick by BIFR was rejected as Section 75 provisions are mandatory, leaving no scope for leniency. The appeals were rejected.