Company Complies with Final Order, Granted Delay Condonation for Interest Payment

IN RE : FLIGHT RAJA TRAVELS PVT. LTD.

IN RE : FLIGHT RAJA TRAVELS PVT. LTD. - 2019 (365) E.L.T. 649 (Sett. Comm.) Issues Involved:
1. Settlement of Service Tax liability.
2. Condonation of delay in payment of interest.
3. Compliance with the Settlement Commission's order.
4. Interpretation of the receipt date of the order.
5. Confirmation of interest liability by the jurisdictional Commissioner.

Issue-wise Detailed Analysis:

1. Settlement of Service Tax Liability:
The Applicant, M/s. Flight Raja Travels Pvt. Ltd., initially admitted a Service Tax liability of Rs. 1,04,92,488/- and interest of Rs. 48,23,420/- against the demanded amount of Rs. 2,20,33,977/-. The Settlement Commission settled the additional Service Tax liability at Rs. 1,42,01,307/-, directing the Applicant to pay the balance Service Tax amount of Rs. 37,08,819/-, and imposed a penalty of Rs. 5,00,000/-. The Applicant was required to work out the interest liability to the satisfaction of the jurisdictional Commissioner and pay the balance within 30 days.

2. Condonation of Delay in Payment of Interest:
The Applicant paid the balance Service Tax and penalty on 14-3-2017 and the interest on 4-4-2017. The Registry observed a delay of 4 days in the payment of interest and advised the jurisdictional Commissioner to take necessary action. The Applicant filed a miscellaneous application for condonation of delay, arguing that the Finance department received the order on 6-3-2017 and paid the interest within 30 days of this date.

3. Compliance with the Settlement Commission's Order:
The Applicant contended that they complied with the Settlement Commission's order by paying the tax liability and penalty on 14-3-2017 and the interest on 4-4-2017, after obtaining confirmation from the DGCEI. They argued that the period between 14-3-2017 and 3-4-2017 should not be counted for computing the 30 days period due to ongoing communications with the DGCEI for interest computation.

4. Interpretation of the Receipt Date of the Order:
The department argued that the order was received by the Applicant on 1-3-2017, as per the Speed Post Acknowledgement, and thus the interest payment was delayed by 4 days. The Applicant claimed the order was received by the Finance department on 6-3-2017, and the 30 days period should be counted from this date. The Bench concluded that the date of receipt should be treated as 1-3-2017, as per the Postal Acknowledgement.

5. Confirmation of Interest Liability by the Jurisdictional Commissioner:
The Applicant submitted that they were in communication with the DGCEI for interest computation, which was confirmed only on 3-4-2017. They argued that they could not discharge the interest liability without this confirmation. The Bench considered the affidavit and communications submitted by the Applicant and concluded that the period between 14-3-2017 and 3-4-2017 should be excluded from the 30 days period for compliance. The Bench held that the Applicant had complied with the Final Order by paying the balance interest on 4-4-2017.

Decision and Findings:
The Bench held that the Applicant had complied with the Final Order No. 5/2017 by paying the balance interest on 4-4-2017, considering the confirmation of interest liability by the DGCEI on 3-4-2017. The Bench allowed the miscellaneous application for condonation of delay filed by the Applicant.

Order:
Upon reconsideration of the Miscellaneous Application dated 11-10-2017 filed by the Applicant, the same is allowed.