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2019 (12) TMI 1129 - HC - Service TaxService of garnishee notice u/s 87 - Section 73 of the Finance Act, 1994 - case of assessee is that without issuing such show-cause notice under Section 73, impugned garnishee notices could not have been issued under Section 87 (b) of the Finance Act, 1994 - Non-payment of service tax - permission to allow payment of service tax dues in installments - HELD THAT:- A reading of Section 73, would go to show that in the circumstances enumerated in Sub-Section (1) thereof the competent authority may within 18 months (and since 01.04.2017, 30 months), serve a show cause notice upon the assessee as to why he should not pay the amount specified in the notice. However, in a case of fraud the period for issuance of such notice would stand extended to 5 years. After service of show cause notice, if any representation is made by the assessee the same shall be considered and thereafter, the service tax dues may be determined. Further, in a case of self-assessment, the quantum of service tax dues along with interest shall be recovered under Section 87 - A conjoint reading of Sections 73 and 87 of the Finance Act, 1994 would go to show that in case of non-payment of service tax dues covered by the situations enumerated, the competent authority is empowered to issue show cause notice within the time frame provided for payment of service tax dues specified in the notice, the period of notice would stand extended in a case of fraud. The petitioner has not disputed the quantum of service tax dues quantified in the garnishee notices. Petitioner has only highlighted the need and necessity to allow it to pay the dues in installments. Therefore, in a case where the assessee admits to the service tax dues as specified in the show cause notice or in the garnishee notice, no adjudication would be necessary. Demand of Interest - HELD THAT:- Section 75 of the Finance Act, 1994, deals with levy of interest on delayed payment of service tax. It provides for payment of simple interest at such rate not below 10 % and not exceeding 36% per annum for the period of delay. It is thus clear that the interest that may be imposed in case of delayed payment of service tax is not a fixed percentage but ranges between 10% to 36% indicating an element of flexibility - In the instant case, what is seen is that respondent No. 2 has imposed the maximum percentage of interest i.e., 36 % without any exercise of discretion which indicates non-application of mind. Thus, the exercise is arbitrary. Payment of service tax dues in installments - circular dated 28.02.2015 - HELD THAT:- As per the said circular, Commissioners have been given the discretion for granting sanction to pay arrears in installments upto a maximum of 24 monthly installments and Chief Commissioners more than 24 and upto a maximum of 36 monthly installments. It has been emphasized that approval to pay in installments and the number of installments should be fixed in such a way so that an appropriate balance is maintained between recovery of arrears and survival of business. - Allowed to paid in 48 equated monthly installments Petition disposed off.
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