2010 (4) TMI 459

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....t of the appellant. Service tax payable for the months of October, 2006 to December, 2006 were paid only on 1-3-2007, the service tax payable for Jan.  2007 was paid on 9-3-2007 and service tax for March, 2007 was paid on 7-5-2007. While paying the service tax, the appellant also deposited interest payable. Further, since there was delay in filing ST-3 return, the appellant also paid penalty of Rs. 2,000 under section 77 of the Finance Act, 1994, and is not contesting the same. 2. On verification and finding that the appellant had not paid interest correctly, a show-cause notice was issued to the appellant on 13-6-2008. Admittedly, the difference arose because the appellant had calculated interest up to the date of presentation of chequ....

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....d that show-cause notice was correctly issued and in this case interest is payable from the date of realization of cheque and not from the date of challans. He also submitted that since appellant had not paid full amount of tax and interest, show-cause notice was correctly issued and penalty was correctly imposed. 5. According to section 73(3) of Finance Act, 1994, in case of short payment of service tax, the assessee can make payment on the basis of his own assessment before issue of any notice and if the Central Excise Officer finds that full amount has not been paid notice can be issued within a year. From the above it becomes clear that in this case there was a short payment to the extent of interest payable and notice has been right....

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....date of presentation of the cheque is date of payment". Further learned advocate also brought to my notice to Para 3.3 of CBEC Manual. This Para also provides "once the assessee has deposited the cheque in the bank designated by the CBEC, the date of presentation of the cheque shall be deemed to be the date on which duty has been paid, subject to the realization of the cheque." Clause subject to realization has to be taken to mean that cheque should not be dishonoured. Further, on going through the challan, it is noticed that even though the date of realisation is available on the challans but date of presentation is not available. Obviously, the bank returned the challans duly stamped only on realization. Therefore, even though rule provid....