TaxTMI 
TaxTMI 
2025 (9) TMI 545
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..../- (Rupees Two Thousand only) under Section 70 of the Finance Act, 1994 read with Rule 7(c) of the Service Tax Rules, 1994." 2.1 Appellant is engaged in providing security services to Narora Atomic Power Station, Narora, Bulandshahar defined under Section 65 (94) and 65 (105) (w) of the Finance Act, 1994. 2.2 During the course of audit of the records of the appellant following observation have been made:- "1. The party has not paid interest on delayed payment of Service Tax for the period April 09 to Jan. 10. On being pointed out the party Informed that since the cost of deployment is reimbursed by Narora Atomic Power Station Narora, to whom they are providing the services, the interest also will have to be paid/reimbursed by the NAPS and they will write to the NAPS regarding the same. 2. The party has filed ST-3 returns for the period 4/2009 to 9/2009 on 27.04.2010. Thus they are liable for depositing the late fees as per Rule 7 (C) of the Service Tax Rules. The party have not deposited the late fees till date. 3. On perusal of the ledger obtained from NAPS for the period April 09 to Dec. 2012, it was noticed that CISF has been reimbursed, by the N....
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.... in the preceding paras." 2.5 Aggrieved appellant have filed appeal before this Tribunal and the Tribunal vide Final Order No.71323/2019 dated 26 June, 2019 has held as follows:- "2. The disputed issue relates to the addition of reimbursable expense into accessible value of the services being provided by the appellant. We find that the disputed issue stands decided by various decisions of the Hon'ble High Courts including Hon'ble Supreme Court in the case of Union of India V/s Inter Continental (India) reported as 2008 (226) E.L.T. 16 (S.C.). The applicability of the said decision is required to be verified and examined as also types of expenses being claimed by the appellant as reimbursable. As such, we deem it fit to set aside the impugned order and remand the matter to the Adjudicating Authority for fresh decision in the light of the precedent judgments upon which the appellant may chose to rely upon. Needless to say they would be given an opportunity to put forth their case. We also make it clear that all the issues are left open for reconsideration by the Adjudicating Authority." 2.6 In the remand proceedings, matter has been decided by the impugned order referr....
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.... SECTION [70. Furnishing of returns. ((1)) Every person liable to pay the service tax shall himself assess the tax due on the services provided by him and shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency land with such late fee not exceeding two thousand rupees, for delayed furnishing of return, as may be prescribed. (2) The person or class of persons notified under sub-section (2) of section 69, shall furnish to the Superintendent of Central Excise, a return in such form and in such manner and at such frequency as may be prescribed.) RULE [7C. Amount to be paid for delay in furnishing the prescribed return.((1) Where the return prescribed under rule 7 is furnished after the date prescribed for submission of such return, the person liable to furnish the said return shall pay to the credit of the Central Government, for the period of delay of - (i) fifteen days from the date prescribed for submission of such return, an amount of five hundred rupees; (ii) beyond fifteen days but not later than thirty days from the date prescribed for submission of such return, an amount of ....
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.... required to be paid "from the first date of the month succeeding the month in which duty ought to have been paid under the Act", in the event of non-levy or non-payment or short-levy or short-payment of any duty of excise. All duties of excise are leviable and payable at the time of clearance or removal of the goods produced or manufactured. The question of non-levy or non-payment or short-levy or short-payment would thus arise at the time of such clearance or removal. The relevant date for claiming interest, thus, would be the date of clearance without payment of full duty, occasioning such non or short-levy or payment. The observations of our Court in that case that the provisions of Section 11AB, inserted with effect from 28th September, 1996, would apply only to those cases where clearances were effected after 28th September, 1996, have to be read in that context. In our case, we are concerned with interest payable under Section 28AA of the Customs Act, which is in pari materia with Section 11AA of the Central Excise Act and not Section 11AB of the Act. Section 28AA, as it stood at the relevant time, provided for the assessee's liability to pay interest if customs duty was not....
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.... and with an intention to delay the recovery. That was visible and apparent. Thereafter the Prothonotary & Senior Master of this Court could not encash the bank guarantees and time was lost because of another deliberate act of the petitioner from 1992 till 2004. In the circumstances, a very reasonable demand has been raised and which is of payment of interest from the date on which Section 11AA came into force up to 7th October, 2004. That is not time-barred because of the events which have been admitted by the petitioner. Thus, from 1995 till 2004, there were several steps taken and culminating in issuance of a detention order dated 13th October, 1999. Thereafter, the petitioner came forward to pay the sum but after nearly five years. Hence it is not open to the petitioner to raise any technical pleas. Each one of them is, therefore, frivolous. The writ petition deserves to be dismissed. 13. Mr. Rao relies upon the following two decisions one of which is of this Court : (1) Calcutta Jute Manufacturing Co. v. Commercial Tax Officer, 1997 (93) E.L.T. 657 (S.C.). (2) Premier Limited v. Union of India, 2014 (309) E.L.T. 3 (Bom.). 14. Before we proce....
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....8 to 50 and pages 51 to 52, then, we do not think that the petitioner can insist on compliance with any legal requirement much less of issuance of a show cause notice, personal hearing and a reasoned order thereafter demanding interest. There being no dispute on facts, there being no lis that we are of the view that the first contention of Mr. Patil must fail. 15. Equally untenable is his second contention that recovery of interest in this case is not automatic. In that regard, Mr. Rao's contentions deserves acceptance. 16. In the case of Aditya Mass Communications (Pvt.) Ltd. v. Andhra Pradesh State Road Transport Corporation reported in AIR 2003 SC Pg. 3411, the Hon'ble Supreme Court held as under : "8. The facts narrated hereinabove clearly shows the respondent has retained the money belonging to the appellant without authority of law and has driven the appellant to series of litigations, therefore, this fact itself should have been sufficient to refuse the request of the respondent made before the High Court for reduction of rate of interest. The quantum of interest a Court may allow in a given case is governed by the facts of the case and not by any ....
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....[(1961) 3 SCR 676 = AIR 1961 SC 908]. Referring to the province of the Interest Act of 1839, in relation to the compulsory acquisition of land where no specific provision is made for grant for awarding the interest, the Court held at p. 917 of AIR) : "In this connection we may incidentally refer to Interest Act, 1839 (XXXII of 1839). Section 2 of this Act confers power on the Court to allow interest in cases specified therein, but the proviso to the said section makes it clear that interest shall be payable in all cases in which it is now payable by law. In other words, the operative provisions of S. 1 of the said Act do not mean that where interest was otherwise payable by law Court's power to award such interest is taken away. The power to award such interest on equitable grounds or under any other provisions of the law is expressly saved by the proviso to S.1. This question was considered by the Privy Council in Bengal Nagpur Railway Co. Ltd. v. Ruttanji Ramji, [(1938) 65 Ind App 66 : AIR 1939 PC 67]. Referring to the proviso to S.1 of the Act the Privy Council observed "this proviso applies to cases in which the Court of equity exercises its jurisdiction to allow inter....
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....settled at rest by the Constitution Bench. The majority speaking through Doraiswamy Raju, J. has opined that the basic proposition of law that a person deprived of the use of money to which he is legitimately entitled has a right to be compensated for the deprivation by whatever name it may be called, viz., interest compensation or damages and this proposition is unmistakable and valid; the efficacy and binding nature of such law cannot be either diminished or whittled down. It was held that in the absence of anything in the arbitration agreement, excluding the jurisdiction of the arbitrator to award interest on the amount due under the contract and in the absence of any other prohibition, the arbitrator can award interest. .............. 24. Unless otherwise ordered by the Court, the successful party at the end would be justified with all expediency in demanding compensation and being placed in the same situation in which it would have been if the interim order would not have been passed against it. The successful party can demand (a) the delivery of benefit earned by the opposite party under the interim order of the Court, or (b) to make restitution for what it ....
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.... uphold the demand of interest." 4.6 Hon'ble Supreme Court in the case of M/s Navyug Engineering Co. Ltd. Vs Union of India 2024 (390) ELT 3 (SC) has held as follows:- "10.1 The text of Section 125(2) clearly provides that, where any fine in lieu of confiscation of goods is imposed under sub-section (1), the owner of such goods shall be 'liable to any duty and charges payable with respect to such goods'. The sub-section provides that the liability to any duty and charges, that are payable, shall be paid in addition to the fine. We have held that Section 28 would come into operation for assessing and determining the duty and other charges payable with respect to goods redeemed under Section 125(2). Once Section 28 applies for determination of duty obligation arising under Section 125(2), the interest on delayed payment of duty arises under Section 28AB. The said provision obligates payment of interest in addition to the duty. We thus answer the last issue by holding that the interest liability under Section 28AB is also attracted." 4.7 In another case, Hon'ble Supreme Court in the case of M/s Steel Authority of India Ltd. 2019 (366) ELT 769 (SC) has held as follows:- ....
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....ave no doubt in our mind that under Rule 7(4), the expression "succeeding the month for which such amount" is determined refer to the month of removal of the goods. When the provisional assessment has such consequences, it would occasion an invidious discrimination to place an interpretation on Section 11AB by which those assesses who go in for provisional assessment under Rule 7 are called upon to pay interest upon finalization of the assessment with reference to the date of removal in a case where the value is fully determined as a result of escalation clause being worked resulting in an upward revision of prices and under Section 11AB payability arises with reference to the date of decision to grant escalation. In other words, the law will have to be interpreted in a manner that it is fair and equal to similarly situated group of assessees. Legislative intention, in this regard, also cannot be otherwise. Legislature has clearly in Section 11AB spelt out the time with reference to the Act and the Rules. Under Section 11AB in the case of short-levy or short payment inter alia, the expression "month in which the duty has become payable" under the Act and the rules must be understoo....
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....owing words have been inserted : - "Whether or not such non-levy or non-payment, short-levy or short-payment or erroneous refund, as the case may be, was on the basis of any approval, acceptance or assessment relating to the rate of duty on or valuation of excisable goods under any other provisions of this Act or the rules made thereunder." No doubt, it had the effect of taking away the basis for the decision in the case of Collector of Central Excise, Baroda v. Cotspun Ltd, reported in (1999) 7 SCC 633, which took the view that a levy based on the approved classification list, is not short-levy. But its impact goes beyond the same. Power under Section 11A to recover the duty which has not been levied or not been paid or short-levied or short-paid will be available inter alia irrespective of, whether the aforesaid contingency was or was not the result of any approval, acceptance or assessment either relating to the rate of duty or the valuation under the Act and the Rules. Thus, even when there has been an assessment or acceptance in relation to the rate of duty or valuation, it does not stand in the way of invoking power under Section 11A. 55. Rule 12 de....
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....nts of assessment, namely, valuation. There is no dispute regarding the quantity removed. There is no issue relating to rate of duty. The dispute is relating to the correct value. To appreciate it better, let us take an example of an assessee who deliberately undervalues the goods which he removed. This results in assessee arriving at an amount which would not be the correct amount. He pays this incorrectly assessed amount. Would it be a case of short-levy or short payment? If short-levy is to be understood as confined to cases where the assessment is not the full assessment, taking into account the parameters involved correctly, namely, rate of duty, valuation and quantity it could be classified as a case of short-levy as one of the components of proper assessment namely, valuation has been incorrectly arrived at. The payment in such a case is made in terms of the incorrectly assessed figure. The payment matches the assessment. In fact, it is worthwhile to recall that under Rule 10 of 1944 Rules which we have adverted to, the expression "short-payment" is not used. Instead the words duty has not been paid in full, has been used. No doubt, in a case where in law though the amount w....
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....hich was very much within the knowledge of the assessee and the demand for interest is sustainable." 4.8 In view of the above, I do not find any merits in the submissions made by the appellant with regards to the recovery of late fee under Section 70 also. Such liability for compliance with the levy and procedural requirements cannot be waived. It is settled position in law as held by Hon'ble Supreme Court in the case of M/s Gujarat Travancore Agency 1989 (42) ELT 350 (SC) by holding as follows:- "4. Learned Counsel for the assessee has addressed an exhaustive argument before us on the question whether a penalty imposed under Section 271(1)(a) of the Act involves the element of mens rea and in support of his submission that it does he has placed before us several cases decided by this Court and the High Courts in order to demonstrate that the proceedings by way of penalty under Section 271(1)(a) of the Act are quasi criminal in nature and that, therefore, the element of mens rea is a mandatory requirement before a penalty can be imposed under Section 271(1)(a). We are relieved of the necessity of referring to all those decisions. Indeed, many of them were considered by ....