TaxTMI 
TaxTMI 
2026 (6) TMI 60
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....m the appellant. As regards the imposition of penalty under the provisions of section 78 of the Finance Act, the same stands waived off in view of the missing elements of fraud, suppression etc. with intention to evade payment of tax. Further, taking a lenient view in the matter with regard to imposition of penalty of Rs. 14,000/- under Rule 7 of the Service Tax Rules, 1994 read with Section 70 & 77(2) of the Act, I vacate the same too, keeping in mind the fact that the appellant is a government department and intentional non compliance of the provisions of law is not forth coming from the records of the case." 2.1 The appellant is engaged in providing various kind of Postal services including Courier Services etc. 2.2 An enquiry was initiated by the officers of DGGI, Kanpur. During scrutiny of the records of the appellant, it was noticed that service tax amounting to Rs.33,35,261/- had not been paid by the appellant on the services rendered by them during the period from April 2014 to June 2017. Further, it was also found that the said appellant had not filed the ST-3 returns for the period April 2014 to June 2017. 2.3 a show cause notice dated 30.10.2019 was issued to th....
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....Act (ibid) and rules made thereunder. However, an option is given to the party under sub Section (1) (ii) of Section 78 of the Finance Act, 1994 that if the Service Tax along with interest is deposited within thirty days of communication of this order, the amount of penalty liable to be paid by the party shall be twenty five percent of the Service Tax so determined in the order. Provided that the benefit of reduced penalty under the second proviso shall be available only if the amount of such reduced penalty is also paid within such period. (iv) I refrain the penalty as proposed to be imposed upon the party under Rule 5 of Service Tax Rules, 1994 read with Section 77(1) (b) of the Finance Act, 1994 in as much as they failed to keep, maintain or retain books of Accounts, Rule 6 of Service Tax Rules, 1994 read with Section 77(1) (d) of the Finance Act, 1994 in as much as they failed to pay tax electronically, through internet banking, fails to pay the tax electronically and Rule 4A of Service Tax Rules, 1994 read with Section 77(1) (e) of the Finance Act, 1994 in as much as they failed to issues invoice in accordance with the provisions of the Act or rules made thereunder, w....
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.... 4.2 The only issue involved in the present appeal is with regards to the liability of the appellant to pay interest on the Service Tax deposited much after the due date. The delay as per the appellant was not intentional but was on account of delay for the reason of the multiplicity of channels of communication and multiplicity of instructions. Appellant being department of Government of India, was not having any intentions to cause delay in depositing the tax due. They were communicating with the department the bank etc. to deposit the tax due. It was on account of bureaucratic system that the amount towards the tax due was deposited late beyond due date. 4.3 I find indeed that there is delay in making the deposit of service tax due for the period in dispute. The service tax amounting to Rs 10,16,176/- for the period October 2016 to June 2017 was deposited on 23.02.2021. Section 75 of the Finance Act, 1994 provides as follows: SECTION 75. Interest on delayed payment of service tax.- Every person, liable to pay the tax in accordance with the provisions of section 68 or rules made there under, who fails to credit the tax or any part thereof to the account of the Centra....
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....amount of tax withheld and the extent of the delay in paying the tax on the due date. Essentially, it is compensatory and different from penalty - which is penal in character." 4.4 In case of Gateway Terminals India P. Ltd. [2019 (369) E.L.T. 1791 (Tri. - Mumbai)] Bombay Bench has held as follows: 4.7 In view of the discussions as above we are not inclined to agree with the submissions made by the appellant [in] respect of the interest. We are also not inclined to agree that demand of interest should be limited to the amounts demanded in cash and not in respect of the amounts allowed to be debited from the EPCG licenses. In our view when short/non-payment is adjudged under Section 28, Section 28AA mandates the interest to appropriate rate on the quantum of short/non-payment adjudged independent of the fact that how the said amount is paid. 4.5 In case of Steel Authority of India Ltd. [2019 (366) E.L.T. 769 (S.C.)] a three judges bench of Hon'ble Supreme Court held as follows: 60. It is true that the statutory authority has found it to be a case of short payment. In the notice issued claiming interest it is stated there is short levy (see page 89 Vol.II SLP p....
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....nd it is not referring to the short payment of duty which was originally occasioned and which is the subject matter of Section 11A(2)(b) and Section 11AB. 63. We are of the view that the reasoning of this Court in the order referring the cases to us (to this Bench) that for the purpose of Section 11AB, the expression "ought to have been paid" would mean the time when the price was agreed upon by the seller and the buyer does not square with our understanding of the clear words used in Section 11AB and as the rules proclaim otherwise and it provides for the duty to be paid for every removal of goods on or before the 6th day of the succeeding month. Interpreting the words in the manner contemplated by the Bench which referred the matter would result in doing violence to the provisions of the Act and the Rules which we have interpreted. We have already noted that when an assessee in similar circumstances resorts to provisional assessment upon a final determination of the value consequently, the duty and interest dates back to the month "for which" the duty is determined. Duty and interest is not paid with reference to the month in which final assessment is made. In fact, any ....