Service Tax — Payment by cheque — Delay in encashment beyond due date — No interest/penalty charged

Payment by cheque deemed made when handed to bankers; no interest or penalty if deposited before due date and honoured.

Where a taxpayer deposits service tax by cheque into an authorized bank before the due date and the cheque is later honoured, the payment is deemed made on the date the cheque was handed to the Government's bankers, and the Department need not recover interest or impose penalty solely because the bank credited the account after the due date; however, if the cheque is dishonoured or clearance is abnormally delayed due to the assessee's lapse, penal action may be taken.