2016 (9) TMI 539

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....ive charges received from the client. Even though the subject receipt is not subject to service tax, the appellant paid the differential tax as pointed out by the department. The appellants were issued with Show Cause notice No. 51/2010 dated 06.08.2010 proposing to levy interest of Rs. 7,32,739/- along with penalty under Section 77(2) of the Finance Act, 1994. The adjudicating authority vide Order-in Original No.24/2011 dated 18.05.2011 confirmed the proposal on the ground that the payment was not made under protest and are thus liable to pay interest. On appeal by the appellant, the Commissioner (Appeals) rejected the same on the ground that when any tax liability is deferred and subsequently discharged, then interest should be discharged....

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....posed under Section 76 & 78, the appellant has betrayed the faith by not depositing and contesting the interest liability. This is an afterthought. The appellant has not contested the tax liability and are therefore liable to pay interest. He relied on the following cases:- 1. CCE Vs International Auto Ltd. 2010 (250) ELT 3(SC) 2. CCE & C. Aurangabad Vs Padmashri V.V.Patil S.S.K. Ltd.2007 (215) ELT 23 (Bom) 3. Abhinav Industries Vs CCE Jaipur 2011 (264) ELT 538 (Tri-Del) 4. In counter, Ld. Advocate submitted that Hon'ble Bombay High Court decision (supra) relied by Revenue itself makes it clearly that interest can be levied only when the duty is determined and confirmed. In this regard, he referred to para-3 of the said decisi....

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....ative charges received from the client which, according to Section 67, do not form part of the taxable value and no interest can be levied except by way of demanding tax and confirming the same in the adjudication proceedings. Similarly, the Bombay High Court judgement relied by A.R in the case of CCE & C. Aurangabad Vs Padmashri V.V.Patil S.S.K. Ltd. (supra) is on a different footing inasmuch wherein in the OIO, demand was confirmed and appropriated and accordingly interest was also ordered whereas in the instant case there is no confirmation and appropriation in the order. Therefore, the said decision is not applicable to the facts of this case. Similarly, Revenue reliance on the decision of Delhi Bench of the Tribunal in the case of Abhi....