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2019 (5) TMI 665

ing demand of interest. However, Hon’ble High Court of Delhi has held in the case of HINDUSTAN INSECTICIEDES LTD. VERSUS COMMISSIONER CENTRAL EXCISE, LTU [2013 (8) TMI 225 - DELHI HIGH COURT] that the demand for interest must be raised within the same time limit as taken of tax itself. In other words, the demand can be raised within 18 months (as applicable during the relevant period) if there are no elements of fraud, collusion, wilful mis-statement and within 5 years if these elements are present. - In the impugned order the adjudicating authority held that these elements were not present and as well as dropped the proposal to impose penalty under Section 78. Therefore, only the normal period of limitation of 18 months applies. The .....

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S- 001-COM-043-15-16, dated 02.02.2016. 2. The facts of the case are that the appellant herein is a provider of services and had filed service tax returns but had not discharged the service tax liability during the relevant period. They paid service tax belatedly. Learned Consultant for the appellant submits that the delay was due to their financial difficulties and the entire amount of service tax which was due was paid by them. He also submits that this is not a case that they had suppressed the value of services rendered. In fact, they had declared the entire value of services in their ST-3 returns accurately which itself has been taken as basis by the department in the impugned order and the show cause notice. The relevant period is Apr .....

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during the relevant time. On the question of demand of interest, he submits that it has been now well settled that although there is no time limit for demanding interest under the Finance Act, 1994; it has been decided by the Hon ble High Court of Delhi in the case of Hindustan Insecticides Ltd., [2013 (297) ELT 332 (Del)] and Kwality Ice Cream [2012 (281) ELT 507 (Del)] that whatever limitation applies to the demand also applies to the interest on it. Therefore, unless provisions of fraud, collusion, wilful mis-statement etc., are invoked, the demand for interest has to be made within the normal period of limitation. It is his further submission that in the present case the element of fraud, collusion, willful mis-statement etc., are absen .....

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the term on relevant date as - (i) In the case of taxable service in respect of which service tax has not been levied or paid or has been short levied or short paid- (a) Where under the rules made under this chapter, a periodical return, showing particulars of service tax paid during the period to which the said return relates, is to be filed by an assessee, the date on which such return is so filed; (b) Where no periodical return as aforesaid is filed, the last date on which such returns is to be filed under the said rules; (c) in any other case, the date on which the service tax is to be paid under this Chapter or the rules made there under. (ii) In a case whether the service tax is provisionally assessed under this Chapter or the rules .....

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eadline of 18 months. Therefore, he would argue that there is no time bar in the demand of interest and it needs to be upheld. 7. On the question of waiver of penalty under Section 76 and 77 Learned DR submits that there is nothing on record to substantiate any of the claims of the appellant. Regarding financial hardships and accounting problems, etc., there is no case to invoke of provisions of Section 80. Therefore, the appeal may be rejected. 8. I have considered the arguments on both sides and perused the records. On the first question of payment of interest, it is undisputed that the assessee has paid the service tax but not the applicable interest. Therefore, the department has issued the show cause notice to demand interest. There is .....

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g payments for their services from their clients. This is not substantiated by any documents apart from the assertion by the appellant before me and before the adjudicating authority. The conduct of the appellant also does not inspire much confidence because if there were difficulties and do they had paid the service tax late, they should have also paid the interest along with it instead of waiting till a show cause notice is issued by the department and then contesting it. Under these circumstances, I do not find sufficient grounds to invoke the provisions of Section 80 and waive the penalty. 10. In view of the above, I find the impugned order is correct and needs no intervention. 11. The impugned order is upheld and the appeal is rejected .....

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