2001 (12) TMI 1

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....2001 of the Commissioner (Appeals) vide which he had affirmed the Order-in-Original of the D.C. who confirmed the demand of interest of Rs. 1,34,805/- and penalty of Rs. 400/- under Section 76 and of Rs. 2,000/- under Section 77 of the Finance Act. 2. The facts are not much in dispute. The appellants were engaged in rendering service of telephones. They collected serve tax during the period March....

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....from them nor penalty could be imposed under any provisions of the Finance Act. The Deputy Commissioner, however, did not agree with their version and opined that though the cheque for deposit of the tax amount was given on 24-4-2000, but the same was encashed after clearance from the bank on 26-4-2000 and as such, there was a delay of one day in making deposit and on that score interest amounting....

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....ally sustainable. Payment of the tax under the Finance Act by cheque is permissible. Even Rules 79 and 80 of the Treasury Rules make it clear that Government dues can be presented in the form of cheque into the authorised bank. If the cheque is not dishonoured later, the payment shall be deemed to have been made on the date when the cheque was handed over to the Government's bankers. This has been....

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....nal action etc. as deemed fit. In the face of this circular and the view taken by the Government in the matter of Sahara Airlines Ltd. (Supra), no demand for interest of Rs. 1,34,805/- and penalty of Rs. 400/- under Section 76 could be raised from the appellants. They, as observed above, deposited the tax by cheque on 24-4-2000, one day earlier to the due date i.e. 25-4-2000 and their cheque was n....