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of <h1>Tribunal Overturns Interest Demands in Service Tax Transfer Cases, Emphasizes Accountability</h1> The Tribunal set aside the interest demand in two cases involving the transfer of Service Tax between accounts. In both instances, delays were attributed ... Service Tax – BSNL got autonomous body in 2000. Procedure for payment of service tax has been changed. Due to delay in instruction form DOT, no interest is payable Issues:1. Demand of interest due to delay in transferring Service Tax from one account to another.2. Applicability of previous judgments in similar cases to set aside interest demand.Analysis:Issue 1: Demand of interest due to delay in transferring Service TaxIn the first case (ST/24/2002), the Revenue confirmed the demand of interest on the grounds of delay in transferring Service Tax deposited by the appellants from one account to another. The counsel argued that in a similar case involving BSN Ltd., interest demand was set aside as the tax was credited in the Central Excise Department on time, and the delay was due to departmental transfer delays. The Tribunal, following previous orders, set aside the interest demand, stating that the delay in transfer was not attributable to the appellants.Issue 2: Applicability of previous judgments in setting aside interest demandIn the second case (ST/106/2003), the appellants were required to credit Service Tax on specific dates but faced delays due to changes in accounting procedures and delayed instructions for payment. The Chartered Accountant argued that delays were due to the Department of Telecom and not attributable to the appellants. Citing previous judgments involving BSN Ltd., the Tribunal set aside the interest demand, agreeing that delays were caused by the Department of Telecom and not the appellants. The appeal was allowed with consequential relief.In both cases, the Tribunal relied on previous judgments involving BSN Ltd. to establish that delays in transferring Service Tax between accounts were not the fault of the appellants, leading to the setting aside of interest demands. The decisions highlight the importance of considering the circumstances leading to delays and attributing responsibility accurately in such cases.
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