2007 (12) TMI 21 - AT - Service Tax

Appellate Tribunal grants refund of service tax, rules interest not payable

The Appellate Tribunal CESTAT, Mumbai ruled in favor of the appellants, granting them a refund of service tax paid during a specific period. The tribunal ... Refund of service tax - levy of interest for delayed payment of service tax - service tax not payable - claim for refundRefund of service tax - levy of interest for delayed payment of service tax - service tax not payable - Entitlement to refund of service tax for the period 16-11-1997 to 1-6-1998 and consequence for levy of interest on that amount - HELD THAT: - The Commissioner (Appeals) had granted refund of the service tax paid for the period 16-11-1997 to 1-6-1998, thereby holding that the service tax amount was not payable. Given that the principal tax was held refundable as not payable, liability to pay interest for delayed payment in respect of that amount cannot be sustained. The Appellate Tribunal, on hearing the parties, set aside the impugned orders which upheld the levy of interest and allowed the appeals on this basis.Refund of service tax for the period 16-11-1997 to 1-6-1998 upheld; consequent levy of interest set aside and appeals allowed.Final Conclusion: The Tribunal allowed the appeals: since the service tax paid for 16-11-1997 to 1-6-1998 was held not payable and refunded, the orders imposing interest in respect of that amount were set aside. The Appellate Tribunal CESTAT, Mumbai ruled in favor of the appellants, granting them a refund of service tax paid during a specific period. The tribunal found that since the service tax amount was held to be not payable, the appellants were not liable to pay any interest. The impugned orders upholding the levy of interest were set aside, and the appeals were allowed.