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2019 (5) TMI 665

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..... 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 18 month period must be reckoned with respect to the relevant date indicated in Section 73(6) In the present case, since the assessee has filed periodical returns the date on which the return is so filed becomes the relevant date. The first set of returns were filed in the instant case on 19.09.2013 and therefore 18 months from this date will be 18.03.2015. The show cause notice was issued on 16.03.2015 .....

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..... as 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 April 2012 to March 2013. Although the appellant paid the entire amount of service tax they have not paid the interest applicable under Section 75 of the Finance Act for the amounts paid by them. Therefore, a show cause notice dated 16.03.2015 was issued by the Commissioner of Central Excise, Audit Commissionerate demanding an interest of ₹ 31,33,394/- under Section 75. It was also proposed to impose a .....

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..... 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 absent as has been admitted in the impugned order by the adjudicating authority himself. Therefore, of the total demand of interest covering the period April 2012 to March 2013 the demand for the period of up to September 2012 is time barred as the show cause notice was issued on 16.03.2015 beyond the period of 18 months. Therefore, interest for this period may be set aside. 5. On the question of penalty under .....

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..... 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 made there under, the date of adjustment to the service tax after the final assessment thereof; (iii) In a case where any sum, relating to service tax, as erroneously been refunded, the date of such refund. Thus, if the assessee pays the service tax along with interest under Section 73(3) no show cause notice will be issued. Penalty provisions will also not be attracted. The assessee has to pay the entire .....

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..... . 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 no time limit in Finance Act 1994 for issuing demand of interest. However, Hon ble High Court of Delhi has held in the case of Hindustan Insecticides (supra) 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 m .....

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