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2018 (6) TMI 1006 - CESTAT MUMBAILiability of Interest and penalty - Point of Taxation Rules - whether the tax was paid on time or was delayed with consequential interest liability? - Held that:- Section 65 (105) describes the taxable event but does not provide any clue as to the point at tax liability arises. For the first time, in 2011, rules for determining the point of taxation in various circumstances was notified and would therefore apply to only a portion of present disputed amount. The adjudicating authority has taken note of rule 3 and rule 6 of Point of Taxation Rules, 2011 as originally notified and prior to amendment of 17th March 2012 and, according to him, the receipt of payment is sufficient to determine the point of taxation. There is no doubt that applicant makes a payment along with proposal whether that first premium is encashed immediately, or otherwise, it is placed at the disposal of the appellant and is, indisputably, consideration for the admitted service - In the present dispute the appellant has admittedly paid duty according to their own interpretation of the point at which the tax liability arises. The claim of the appellant is that the service commences with the acceptance of the proposal. While that may be so, the tax liability is required to be computed from the moment the consideration is received even if the contract of insurance specified the commencement of risk from a different date. Both before and after the notification of the Point of Taxation Rules, 2011, it is the date of payment that determines the performance of the service for discharge of tax liability. The appellant has discharged his duty liability belatedly; consequently the appellant is required to pay interest for the said delay. The provision of section 75 of Finance Act, 1994 are unambiguous that the assessee is obliged to remit interest on delayed payment of tax - the interest liability of the appellant stands confirmed. Interest upheld - penalties set aside - appeal allowed in part.
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