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2016 (9) TMI 539 - CESTAT CHENNAI

2016 (9) TMI 539 - CESTAT CHENNAI - TMI - Levy of interest alongwith penalty - Section 75 and 77(2) of Finance Act, 1994 - tax liability not been fastened on the appellants - administrative charges received from the client - differential service tax paid after pointing out by the department - treatment of payment made as voluntarily or under protest - Held that:- the show cause notice proposes to recover interest under Section 75 and penalty under Section 77(2) on the amount already paid by the .....

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had not disputed the tax liability is also not correct. Hence the demand of interest under Section 75 cannot be fastened on the appellants. Accordingly, penalty under Section 77(2) also fails. - Invokation of extended period of limitation - period of dispute is from October 2006 to July 2008 - Show Cause Notice was issued only on 06.08.2010 - Held that:- the Show Cause Notice does not invoke provision of Section 73 to invoke the extended period of limitation and the case of the department f .....

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Society Ltd., hereinafter referred to as the Appellants are engaged in providing supply of manpower and discharging service tax on the same. The department after the scrutiny of books of accounts alleged that appellant had not paid service tax on administrative charges received from the client. Even though the subject receipt is not subject to service tax, the appellant paid the differential tax as pointed out by the department. The appellants were issued with Show Cause notice No. 51/2010 date .....

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be discharged for the belated period. Hence this appeal. 2. The learned Counsel for the appellant submitted that they consistently disputed the levy of service tax and the payment was not made voluntarily but was made on the compulsion of the department during the course of scrutiny. The payment was made only when pointed out by the department and the same cannot be treated as payment made voluntarily by the appellants themselves. The counsel also submitted that when the assessee paid the servic .....

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i.-Del.) b. W.S. Industries (India) Ltd. Vs CCE Bangalore 2002 (141) ELT 278 (Tri.-Bang.) c. Eicher Demm Vs CCE Chandigarh 2010 (140) ELT 227 (Tri.-Del.) d. CCE Chandigarh Vs Eicher Demm 2010 (252) ELT 519 (H.P) e. Dhillon Kool Drinks Beverages Vs CCE New Delhi 2000 (120) ELT 81 (Tribunal) f. IPCL Vs CCE Rajkot 2004 (177) ELT 1021 (Tri-Mumbai) 3. The learned AR, on the other hand, submitted that when the duty has already been paid, interest also follows. He submits that since penalty was not imp .....

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. Advocate submitted that Hon'ble Bombay High Court decision (supra) relied by Revenue itself makes it clearly that interest can be levied only when the duty is determined and confirmed. In this regard, he referred to para-3 of the said decision. In the instant case, there is nothing available on record to establish that appellant it liable to pay tax and there is no SCN issued. 5. Heard both sides. The issue to be decided in this case is as to whether interest can be levied when tax liabili .....

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hat there is no allegation in the Show Cause Notice to demand or appropriate the amount paid by the appellants. I also find that the finding of the adjudicating authority that the appellants had not disputed the tax liability is also not correct. Hence the demand of interest under Section 75 cannot be fastened on the appellants. Accordingly, penalty under Section 77(2) also fails. I am of the view that the Supreme Court judgement relied by the A.R in the case of CCE Vs International Auto Ltd.(su .....

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