Tribunal rules in favor of appellant, finding time-barred interest demand and dismissing penalty imposition. The Tribunal allowed the appeal, ruling in favor of the appellant. It held that the demand for interest on delayed payment of duty on supplementary ...
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Tribunal rules in favor of appellant, finding time-barred interest demand and dismissing penalty imposition.
The Tribunal allowed the appeal, ruling in favor of the appellant. It held that the demand for interest on delayed payment of duty on supplementary invoices during 2009-10 was time-barred. The penalty imposition was dismissed due to the absence of payment for the intervening period and conflicting views on the issue during the relevant period. The Tribunal set aside the impugned order and granted the appellant consequential relief.
Issues: Appeal against demand of interest on delayed payment of duty on supplementary invoice during 2009-10, imposition of penalty, invocation of extended period of limitation.
Analysis: The appellant contested the demand of interest and penalty imposed due to delayed payment of differential duty on supplementary invoices during 2008-09 to 2010-11. The appellant argued that the demand was time-barred as the show cause notice was issued after an audit in 2012, exceeding the one-year limitation period. The appellant also highlighted conflicting views on the issue, citing a Tribunal decision for support.
The respondent opposed the appellant's contention, emphasizing that as per earlier Supreme Court decisions, interest was due on delayed payments for the intervening period on supplementary invoices. The respondent argued that the self-assessment regime required the appellant to pay interest immediately upon failure to make payment, supporting their stance with a Tribunal decision.
Upon hearing both parties, the Tribunal noted that the appellant did not pay interest for the intervening period despite a 2012 audit directive. The Tribunal found the show cause notice issued in 2015 invoking extended limitation was time-barred, as it was known to Revenue that interest was not paid since 2012. The Tribunal also highlighted conflicting views on the issue, referencing a Supreme Court case that settled the matter in 2019.
Relying on a Tribunal decision, the Tribunal held that the extended period of limitation was not applicable in this case due to conflicting views during the relevant period. Consequently, the demand for interest was deemed unsustainable, leading to the dismissal of the penalty imposition. The impugned order was set aside, and the appeal was allowed with any consequential relief.
In conclusion, the Tribunal's decision favored the appellant by ruling that the demand for interest was time-barred and the penalty was not sustainable, based on the absence of payment for the intervening period and conflicting views on the issue during the relevant period.
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