TaxTMI 
TaxTMI 
2020 (2) TMI 226
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....x to the tune of Rs. 28,47,614/- (Rupees Twenty Eight Lakh Forty Seven Thousand Six Hundred and Fourteen only). This aspect was communicated to the appellants on 23/02/2017. Further, the said observation was converted into Audit Objection vide Audit Report No. 437/2016-17 dated 21/04/2017. It was recorded in the Audit Report that the total interest on delayed payment of Service Tax was Rs. 28,94,792/- (Rupees Twenty Eight Lakh Ninety Four Thousand Seven Hundred and Ninety Two only). The appellants had paid interest amount of Rs. 47,178/- (Rupees Forty Seven Thousand One Hundred and Seventy Eight only) pertaining to the financial years 2014-15 and 2015-16. As they had partly made the payment towards the Audit Objection, the jurisdictional Assistant Commissioner was directed to recover the balance interest amount of Rs. 28,47,614 (Rupees Twenty Eight Lakh Forty Seven Thousand Six Hundred and Fourteen only) under Section 87. Thereafter, the Range Officer issued various letters to the appellants to pay the interest amount forthwith. The appellants contended that the demand of interest is hit by time and they are liable to pay interest only from 2015-16 onwards and any amount due to the....
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....ovisions of Section 75. This view is also held in case of Rolex Rings Pvt. Ltd. Vs. CCE - 2011 (22) STR 303 (Tri.-Ahmd.). Therefore, it is evident that for recovery of interest under Section 75, the provisions of Section 73 would be applicable. b. The provisions of Section 73 are applicable for recovery of interest under Section 75. The case laws and clarifications issued under Central Excise are equally applicable to the service tax as well. Therefore, non-consideration of such case-laws is not proper and legal. c. Without prejudice to the foregoing, the appellant submits that it is very much clear from the harmonious reading of the provisions of Section 73, 75, 76, 78 of Finance Act, 1994 that to recover interest or penalty the issue of show-cause notice is mandatory along with confirmation of demand of tax as well as appropriation if the same is paid. It is settled law, without confirmation of tax demand, calculation of interest cannot be done and penalty cannot be imposed. Therefore, for the present case issue of show-cause notice was compulsory. As there is no show-cause notice issued the demand of interest confirmed in the impugned order is not proper and legal. 4.1. He ....
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....and before that date there was no provision to recover the amount under Section 87. Therefore, confirmation of demand of interest under Section 87 for the period April 2011 to May 2015 is not proper and legal. For this submission, the appellant relied upon the decision in the case of Anrak Aluminium Ltd. Vs. CCE - 2017 (4) GSTL 248 (Tri.-Hyd.) wherein it has been held that for the period prior to 14/05/2015 for recovery of interest, issue of show-cause notice is compulsory. He further submitted that it has been consistently held by the Tribunal that demand of interest can be raised only by way of issuance of show-cause notice. For this submission, he relied upon the following decisions and the circular issued by the Board. a. The Paper Products Ltd. Vs. CCE, Mumbai - 2015-TIOL-559-CESTAT-MUM b. Circular F.No. 208/27/2003-CX-6 dated 18.12.2006 c. Aurangabad Electricals Ltd. Vs. CCE, Pune-I - 2018-TIOL-1031-CESTAT-MUM 4.2. The learned counsel further submitted that the substantial portion of the demand is barred by limitation. He further submitted that for demanding interest also, the period of limitation as prescribed under Section 73 would be applicable. He also submitted th....
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....am Thekedar - 2005 (185) E.L.T. 3 (S.C) d. R. Kuppuswamy 2006 (4) S.T.R. 615 (Commr. Appl.) e. C.C.E, Salem Vs. Suibramania Siva Co-op Sugar Mills Ltd. - 2014 (35) S.T.R. 500 (Mad.) f. Hindustan Insecticides Ltd. Vs. Commr. of C. Ex. & Service Tax (LTU) - 2012 (286) E.L.T. 208 (Tri.-Del.) g. Commr. of C. Ex. & Cus., Calicut Vs. General Manager, Telecom, BSNL - 2009 (14) S.T.R. 450 (Ker.) h. CCE & C, Aurangabad Vs. Padmashri V.V Patil S.S.K Ltd. - 2007 (215) E.L.T. 23 (Bom.) 5.1. As far as application of limitation is concerned, the learned AR submitted that it has been held in various decisions that interest liability is automatic and hence the issue of time limit prescribed for recovery of duty does not apply. For this submission, he relied upon the following decisions: a. Shree Bhagwati Steel Rolling Mills Vs. Commr. of C. Ex., Chandigarh - 2007 (207) E.L.T. 58 (P&H) b. CCE, Ghaziabad Vs. K.L. Concast (P) Ltd. - 2007 (209) E.L.T. 425 (Tri.-Delhi) c. Abhinav Industries Vs. CCE, Jaipur-I - 2011 (264) E.L.T. 538 (Tri.-Del.) d. SKH Auto Components Ltd. Vs. CCE, Delhi-IV - 2011 (274) E.L.T. 273 (Tri.-Delhi) e. Hindustan Insecticides Ltd. Vs. CCE and ST (LTU) - 201....
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....the Tribunal has distinguished the decision of the Apex Court in Citedal Fine Pharmaceuticals case. It is pertinent to reproduce the relevant findings of the decision of the Tribunal which is recorded in para 3.1 & 3.2: "3.1. I have perused carefully the decision of the Hon'ble Apex Court in Citadel Fine Pharmaceuticals case (supra). The only ratio as far as I can see, which has been laid down in the said decision is that merely because the provision of a statute does not lay down any time limit, the exercise of power under the said provisions cannot be invalidated so long as the power is exercised within a reasonable period. The question whether a party should be put to notice or not before initiating any action was not a question before the Hon'ble Apex Court in the said case. Nowhere in the said decision, the Apex Court even remotely hinted that principles of natural justice need not be followed while initiating executive action. Such an interpretation would give the executive unbridled powers which is an anathema to the principle of rule of law. In the Kanhairam Thekedar case decided by the Apex Court, the Apex Court had held that since interest liability accrues automaticall....
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....ns of the Court. The Indian Constitution mandates that clearly, otherwise the Act and the actions would be violative of Article 14 of the Constitution and would also be destructive of Article 19(1)(g) and negate Article 21 of the Constitution by denying a procedure which is just, fair and reasonable. 9.2. Rules of natural justice are not embodied rules. Hence, it was not possible to make an exhaustive catalogue of such rules. Audi Alteram partem is a highly effective rule devised by the Courts to ensure that a statutory authority arrives at a just decision and it is calculated to act as a healthy check on the abuse or misuse of power." Therefore, I am in agreement with the view taken by the Hon'ble Member (Judicial) as far this point is concerned." 6.1. Now the next question arises is whether the period of limitation is applicable for demanding interest or not? In the present case, the demand is made for the period April 2011 to March 2016 by issue of a letter of demand dated 24/08/2017. The Tribunal has dealt with this issue of limitation in various decisions relied upon by the appellant cited supra and it has been consistently held that to demand interest also period of lim....