Customs, Excise and Gold Tribunal - Tamil Nadu
Bpl Mobile Cellular Ltd. vs Cce on 15 December, 2004
Equivalent citations: 2005(183)ELT324(TRI-CHENNAI), 2006[3]S.T.R.478
ORDER P.G. Chacko, Member (J)
1. Examined the records and heard both sides.
2. The appellants paid certain amounts of service, tax belatedly. These payments were made with interest calculated @ 1.5% per month for the respective periods of delay. The particulars of these payments, relevant to this case, are tabulated below:-
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Month Amount Rs. Due date Paid date Delay Interest
in days
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July'97 388,213.00 15.08.97 02.09.97 18 3,381.21
160,960.00 15.08.97 19.11.97 96 7,599.42
Aug'97 184,553.00 15.09.97 18.09.97 3 276.83
149,341.00 15.09.97 19.11.97 65 4,800.25
Sept'97 372,195.00 15.10.97 23.10.97 8 1,488.78
Oct'97 482,816.00 15.11.97 19.11.97 4 934.48
Nov'97 447,951.00 15.12.97 18.12.97 3 671.93
Dec.'97 559,177.00 15.01.98 21.01.98 6 1,623.42
Jan'98 576,372.00 15.02.98 21.02.98 6 1,673.34
Mar'98 1,054,413.00 15.04.98 18.04.98 3 1,530.60
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Total A 23,980.26
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According to the department, if any part of the delay involved in the payment of service tax for a given calendar month is comprised in any calendar month subsequent thereto, the entire length of the latter month would be counted towards delay. According to this view, where the service tax for the month of July'97 was paid on the second day of September 1997 with actual delay of 18 days from the due date (15th day august'97), the entire months of August & September would constitute the delay. In other words, according to the department, there was a delay of 2 months in the payment of service tax for July'97. In this manner, they estimated the interest payable and raised a demand of differential interest on the assessee. This demand was contested by the party on the strength of the specific provisions of Section 75 of the Finance Act, 1994. However, the original authority upheld the department's view and confirmed the demand of interest and the first appellate authority sustained the decision of the lower authority with slight modification of the quantum of interest for the month of July'97. Hence this appeal.
2. Ld. Counsel has submitted that the view taken in the impugned order is contradictory to the express provisions of Section 75 ibid. He has referred to similar provision of Section 16 of the Andhra Pradesh General Sales Tax Act, 1957 and has submitted that the Andhra Pradesh High Court in the case of Lamina suspension Products (P) Ltd. v. State of Andhra Pradesh, (1990) 78 STC 429 held that, where the delay was of a part of a month only, interest could be charged for the period of delay alone and not for the full month. Referring to the Board's circular relied on in the impugned order, learned counsel has argued that this circular is not reliable to the extent it is contradictory to Section 75 of the Finance Act, 1994. In this connection, he has sought to draw support from the Supreme Court's ruling in Kalyani Packaging Industry v. UOI, 2004 (168) ELT 145 (SC), wherein it was held that a circular of the Board could not prevail over the law laid down by the Court.
3. Ld. SDR has also referred to the Board's circular dated 16.11.98 relied on by the learned Commissioner (Appeals). She has made an endeavour to justify the impugned order on the strength of this circular.
4. After giving careful consideration to the submissions, I find that the decision of the lower authorities is not in accordance with the mandate of law. Section 75 ibid reads as under:-
"75. Interest on delayed payment of interest.- Every person responsible for collecting service tax and paying it to the credit of the Central Government in accordance with the provisions of section 68, who fails to credit the tax or any part thereof to the account of the Central Government within the period specified in that section, shall pay simple interest at the rate of one and one half per cent for every month or part of a month by which such crediting of the tax or any part thereof is delayed."
It is noticed that the above provision is, by and large, similar to the interest provisions contained in Section 16(3) of the Andhra Pradesh General Sales Tax Act, which is reproduced below:-
"(3) If the tax assessed or penalty levied or any other amount due under this Act or any instalment thereof is not paid by any dealer or other person within the time specified therefor in the notice of demand or in the order permitting the payment in instalments or in any other provision of this Act or rule made thereunder, the dealer or other person shall pay, in addition to the amount of such tax, penalty, instalment or other amount, interest at the rate of two rupees for every one hundred rupees or part thereof for each month or part thereof, from the date specified for its payment".
In the case of Lamina Suspension Products (supra) cited by learned counsel, it was held by the High Court that, where the delay was of part of a month only, interest could be charged for the period of delay alone and not for the full month. The ratio of this decision should equally be applicable to the facts of the instant case. Accordingly, it has to be held that the interest paid by the assessee for the actual period of delay is in order and nothing more requires to be paid by them towards interest on the service tax amounts paid by them.
5. After a perusal of the circular referred to in the impugned order, I do not think that this circular purported to clarify the provisions relevant to this case. The circular was concerned with the expression "month" used in Section 75 ibid, It did not seek to explain or clarify the expression "part of a month" used in the said section. It is the latter expression which is relevant to this case. Hence the circular is inapplicable and, for this reason, the supreme Court's decision cited by learned counsel is not relevant to this case. In the result, the impugned order is set aside and the appeal is allowed, with consequential relief to the appellant.