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of <h1>Court waives pre-deposit of interest demand in service tax case, emphasizing compliance with payment timelines.</h1> The court granted waiver of pre-deposit of interest demand against the applicant in a case concerning service tax payment timing. The applicant paid ... Waiver of pre deposit - Service provided to associate concern - Held that:- As per the Service Tax Rules, in case of associate firm the service tax is payable at the time of amount is credited to the account of the service provider. In this case the service tax has been paid at the time of actual receipt of the consideration. Therefore, prima facie the applicant is not required to pay interest for the alleged delay in making the payment of service tax. Accordingly, I grant waiver of pre-deposit of interest demand from the applicant and stay recovery thereof during the pendency of the appeal - Stay granted. Issues:1. Waiver of pre-deposit of interest confirmed against the applicant by the impugned order.Analysis:The judgment pertains to an application seeking waiver of pre-deposit of interest confirmed against the applicant by the impugned order. The applicant provided services to their 'associate firm' during a specific period and paid service tax at the time of receipt of consideration. However, the revenue contended that service tax should have been paid at the time of raising invoices for services provided to the 'associate concern,' resulting in a demand for interest against the applicant. The main issue was whether the applicant was liable to pay interest for the alleged delay in service tax payment.The applicant argued that during the relevant period, service tax was payable upon receipt of payment for services provided, which they complied with by paying service tax upon actual receipt of consideration. They contended that since the service tax was paid at the time of actual receipt of consideration, there was no requirement to pay interest. On the contrary, the revenue supported the impugned order, maintaining the demand for interest against the applicant.Upon considering the submissions from both sides and examining the Service Tax Rules, the judge observed that for an associate firm, service tax is typically payable when the amount is credited to the service provider's account. In this case, the service tax had been paid at the time of actual receipt of consideration, not at the time of crediting the amount. Consequently, the judge found that prima facie, the applicant was not obligated to pay interest for any alleged delay in service tax payment. Consequently, the judge granted waiver of pre-deposit of interest demand and stayed the recovery of the interest during the pendency of the appeal.In conclusion, the judgment addressed the issue of waiver of pre-deposit of interest confirmed against the applicant, emphasizing the importance of compliance with the Service Tax Rules regarding the timing of service tax payments, particularly in cases involving associate firms.
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