BIFR corrigendum cannot waive service tax beyond State consent, while no interest applies absent wilful default.

A BIFR corrigendum could not waive service-tax liability without the respondent-State's adjudicated consent under the Sick Industrial Companies Act. The State's consent extended only to the period for 75% service-tax exemption and did not extinguish tax otherwise payable; BIFR could not sanction a scheme beyond that consent. Although the principal tax amount was deposited, the assessee's temporary relief under the relevant notification, undertaking pending related litigation, and continued claim for exemption indicated no wilful default. Service tax therefore remained enforceable, while interest recovery on the deposited principal was excluded on the stated facts.

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Issues: (i) Whether the BIFR had jurisdiction to issue the corrigendum and grant or waive service-tax liability without the respondent-State's consent; (ii) Whether interest was payable on the tax demand after deposit of the principal amount.

Issue (i): Whether the BIFR had jurisdiction to issue the corrigendum and grant or waive service-tax liability without the respondent-State's consent.

Analysis: Section 17(4) of the Sick Industrial Companies (Special Provisions) Act, 1985 was inapplicable, as the corrigendum could not be treated as a review. Consent for financial assistance under Section 19 had to be available and could not be inferred without adjudication. The respondent-State's consent was confined to extension of the period for 75% service-tax exemption and did not waive the tax payable. The BIFR had no adjudicatory role to sanction a scheme beyond the available consent.

Conclusion: The corrigendum did not entitle the assessee to waiver of service tax; the finding was against the assessee.

Issue (ii): Whether interest was payable on the tax demand after deposit of the principal amount.

Analysis: The principal amount had been deposited. The assessee had received temporary relief under the relevant notification, furnished an undertaking pending the decision in the related litigation, and continued to seek the 75% exemption after the corrigendum. These circumstances showed no wilful default.

Conclusion: No interest was payable on the tax demand; the finding was in favour of the assessee.

Final Conclusion: The service-tax liability remained enforceable, but recovery of interest on the deposited principal was excluded on the facts.

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