Payment of Interest

[Srivatsan Krishnamachari]

Dear Learned Friends,

 Liability  towards shot-paid duty or service tax is fulfilled by debiting the cenvat account.. Can interest herein be paid from Cenvat Account or  by only by making cash payment . Is payment of interest from cenvat  account specifically forbidden by the relevant rules.Can you please  clarify this .

Thanks & With Regards,

K.Srivatsan

AI Summary

Interest and penalties on short-paid duty or service tax must be paid in cash, not from the CENVAT account. A participant inquired whether interest on short-paid duty or service tax could be paid from the CENVAT account or if it must be paid in cash, questioning if rules specifically prohibit using the CENVAT account for such payments. Two responses clarified that under the Customs Act, 1962, Central Excise Act, 1944, and Finance Act, 1994, interest and penalties must be paid in cash, with no adjustments allowed from the CENVAT credit account. The same rule applies to the payment of penalties.