2006 (11) TMI 575 - AT - Service Tax

Summary

Issues:
1. Liability of interest on service tax and penalty upheld by the appellate order.
2. Appropriation of service tax paid by the appellant without a demand from the Revenue.
3. Validity of interest and penalty imposed on the appellant.

Analysis:
1. The appeal was filed against an order upholding the demand of interest on service tax and penalty. The appellant had availed services of goods transport operators and voluntarily deposited the duty liability of service tax without any demand from the Revenue. The adjudicating authority appropriated the amount paid by the appellant and imposed interest and penalty. The Commissioner (Appeals) upheld this decision.

2. The appellant argued that the service tax liability as appropriated was not payable since they had deposited the amount before the show cause notice was issued. However, the Revenue contended that the appellant's calculation for payment was not based on any direction and hence, interest was still applicable. The show cause notice only demanded interest and not service tax under section 73 of the Finance Act, 1994. The Tribunal clarified that self-assessed tax paid without Revenue direction is not refundable, citing the case of J. K. Industries Ltd. v. CCE, Indore.

3. The issue of interest demanded from the appellant was favorably resolved in the case of Greenply Industries Ltd. v. CCE, Jaipur. Regarding the penalty, it was found that the appellants failed to file returns in time as required by section 71A of the Finance Act, 1994, specifically for service receivers from goods transport operators. Therefore, the penalty imposed was upheld. The final decision allowed the appeal against interest payment but dismissed the appeal against the service tax demand and penalty, partially allowing the appeal as per the detailed analysis provided.