TMI Blog2015 (6) TMI 626X X X X Extracts X X X X X X X X Extracts X X X X ..... reasury is the date of payment of service tax as per Rule 6(2A) of the said Rules. In these circumstances, we hold that the appellant has paid the service tax in time. Consequently, demand of interest on delayed payments is not sustainable. - Decision in the case of Khyati Tours & Travels [2011 (6) TMI 324 - CESTAT, AHMEDABAD] followed - Decided in favour of assessee. - Appeal No. ST/580/2009-CU[DB] - Final Order No. 51777/2015 - Dated:- 28-5-2015 - Hon ble Mr. Ashok Jindal, Member (Judicial) And Hon ble Mr. R.K. Singh, Member (Technical),JJ. For the Appellants : Shri JK Mittal, Advocate For the Respondents : Shri Amresh Jain, DR ORDER Per Mr. Ashok Jindal : The appeal is against the impugned order denying the benefit of Notification No.1/2006-ST, dated 01.03.2006, thereby confirming service tax demand of ₹ 1,28,89,944/- along with interest and equal amount of penalty and a demand of interest of ₹ 12,138/- under Section 75 of the Finance Act, 1994 for delayed payments. 2. The facts of the case are that the appellant is providing tour operator service during the period 2005-06 to 2006-07, the appellant was availing certain input services for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vat credit, consequently they are entitled to avail the benefit of Notification No.1/2006-ST as held by the Tribunal in the case of Khyati Tours Travels Vs. CCE, Ahmedabad [2011 (24) STR 456 (Tri. Ahmd.)]. He also cited the Hon'ble Allahabad High Court decision in the case of Hello Minerals Water (P) Ltd. Vs. Union of India [2004 (174) ELT 422 (All.)]. For demand of interest, he submits that as per Rule 6(2A) of Service Tax Rules, 1994, the appellant is not required to pay the interest, as per the said Rule, the appellant has deposited the cheque on the due date and same is the date of payment of service tax subject to realisation of the said cheque. Therefore, the appellant is not required to pay interest as demanded by the adjudicating authority in the impugned order. Therefore, the impugned order is to be set aside. 4. On the other hand, ld. Departmental Representative opposed the contentions of the ld. counsel and submits that the appellant is not entitled to avail the benefit of Notification No.1/2006-ST as per the decision of the Tribunal in the case of Hind Lamps Ltd. Vs. CCE, Kanpur [2010 (250) ELT 237 (Tri. Del.)]. In fact, this Tribunal has relied on the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the exempted goods. Therefore the observation made by the Hon'ble court only obiter dicta and the Hon'ble Apex Court has also quoted that the said reversal is permissible and assessee is entitled for exemption. Therefore, the facts of the said case are not applicable in this case. Moreover, those observations made by the Hon'ble Court in the case of manufacture of goods and central excise duties payable thereon. This case is pertained to the providing of output service, i.e., tour operator. Moreover, the decision of Chandrapur Magnet Wires (P) Ltd.(supra) was examined by the Hon'ble High Court of Allahabad in the case of Hello Minerals Water (P) Ltd.(supra), wherein the Hon'ble court has observed as under:- 17. The question as to whether manufacturer can be treated as not having taken credit on the inputs used in the manufacture of final product, even though it was originally taken but subsequently reversed, has been decided by a five Member Bench of the Tribunal in the case of Franco Italian Company Pvt. v. CCE, 2000 (120) E.L.T. 792. The aforesaid five members Bench of the Tribunal after taking into account the ratio laid down by the Supreme Court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench of the Tribunal as well as three member bench of the Tribunal, and is also contrary to the ratio of the decision of the Supreme Court in the case of Chandrapur Magnet Wire (supra). Therefore, the argument advanced by the ld. Departmental Representative that if reversal is made before point of taxation only then the tax exemption is available is not acceptable to us. Further, we find that a similar issue came before this Tribunal in the case of Khyati Tours Travels (supra),wherein this Tribunal has observed as under:- 4. It is seen that the appellant had reversed the wrongly availed Modvat credit along with interest, the same will have the effect as if no credit was availed by the appellants. The law on the above point is very clear and stands settled by various decisions of judicial as also the quasi judicial authorities. For the sake of convenience we may refer to the order passed by Commissioner (Appeals) in the case of Om Shanti Travels, Ahmedabad being Order-in-Appeal No. 197/2010(STC)/MM/ Commr(A)/Ahd dated 9-8-2010, wherein after summarising the entire case law, the benefit stands extended to the assessee. We reproduce the relevant paragraphs from the said order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , appellant is entitled for the benefit of Notification No.1/2006-ST. In these terms the demand of service tax along with interest and equivalent amount of penalty are set aside on this issue. 9. With regard to the issue of payment of interest for delayed payments, we find that Rule 6(2A) of the Service Tax Rules, 1994 deals the situation, which is reproduced below:- Rule 6(2A): For the purpose of this rule, if the assessee deposits the service tax by cheque, the date of presentation of cheque to the bank designated by the Central Board of Excise and Customs for this purpose shall be deemed to be the date on which service tax has been paid subject to realisation of that cheque. Admittedly, in this case, the appellant has paid the service tax through cheque on due dates and the same stand realised on a later date. Therefore, the date of deposited the cheque into the treasury is the date of payment of service tax as per Rule 6(2A) of the said Rules. In these circumstances, we hold that the appellant has paid the service tax in time. Consequently, demand of interest on delayed payments is not sustainable. 10. In view of both the issues are answered in favour of the appel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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