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Sree infra Tech v/s Commissioner of Central Excise Tiruchirapalli

Company & Directors' Information:- D S P INFRA TECH PRIVATE LIMITED [Active] CIN = U45200TG2008PTC059001

Company & Directors' Information:- A S INFRA-TECH PRIVATE LIMITED [Strike Off] CIN = U45204MH2005PTC154952

Company & Directors' Information:- TECH INFRA PRIVATE LIMITED [Active] CIN = U45203JK2003PTC002266

Company & Directors' Information:- J V R INFRA-TECH (INDIA) PRIVATE LIMITED [Strike Off] CIN = U45400TG2011PTC073611

Company & Directors' Information:- B & G INFRA TECH PRIVATE LIMITED [Strike Off] CIN = U45200TN2008PTC066468

Company & Directors' Information:- B S L INFRA-TECH PRIVATE LIMITED [Active] CIN = U74900DL2011PTC224481

Company & Directors' Information:- M S TECH-INFRA PRIVATE LIMITED [Active] CIN = U28998MH2021PTC353763

    Appeal No.ST/42121 of 2013 [Arising Out of Order-in-Appeal No.74 & 75 of 2013 dated 16.7.2013 passed by the Commissioner of Customs & Central Excise (Appeals), Tiruchirapalli]

    Decided On, 17 January 2014

    At, Customs Excise Service Tax Appellate Tribunal South Zonal Bench At Chennai


    For the Appellant: Alagappan, Advocate. For the Respondent: K.P. Muralidharan, Supdt. (AR).

Judgment Text

1. The appellant undertook maintenance and repair of roads during the period April 2008 to 31st March 2009. They were not collecting service tax on such activity and remitting to government during the said period. On audit of the books of accounts of the appellant in Aug 09, the departmental officers pointed out that such activities would attract service tax and an amount of Rs.11,74,726/- was due from them. Thereupon, the appellant collected the service tax amount from the customers to whom they rendered services and paid the service tax. However, no interest was paid. Therefore, the department issued show cause notice for recovery of tax not paid in time and also for appropriating tax subsequently paid and also demanding an interest amount of Rs.1,31,888/-. By the time of adjudication, Section 97 was inserted in Finance Act, 1994 exempting service tax in respect of management, maintenance and repair service retrospectively from 16-05-2005, by Finance Act 2012. Consequently at the time of adjudication, the demand for tax was dropped. The adjudicating authority ordered that the amount already paid by the appellant be credited to the Consumer Welfare Fund in terms of Section 73A(6) of the Finance Act, 1994. Further the demand for interest of Rs.1,21,011/- was confirmed against the appellant. Aggrieved by the order, the appellant filed appeal with Commissioner (Appeals). The Commissioner (Appeals) modified the order of crediting the money to Consumer Welfare Fund and ordered that the amount shall be restored to the government account. However, he did not give any relief in respect of the interest demanded from the appellant. Aggrieved by the order of Commissioner (Appeals), the appellants have filed this appeal.

2. The appellant is not contesting the tax amount collected and remitted to government account. He is only contesting the demand of interest from the appellant. The argument of the Counsel for appellant is that when the principal amount itself was not payable, demand for interest is not sustainable. Therefore, he prays that demand for interest may be set aside.

3. Ld. AR for Revenue submits that appellant had collected the amount on 16.9.2008 and on 3.10.2008 and these amounts were actually remitted only on 5.10.2009 and therefore there was delay in paying the tax amount and interest demanded is maintainable.

4. As a rejoinder, the consultant for the appellant submits that the dates of 16-09-08 and 3-10-08 were the dates on which the contract amounts were realized including service tax and the service tax amount was collected only on 1.10.2009 and the same was remitted on 5.10.2009 and there was no delay in remitting tax. At any rate, when the appellant did not owe any money to the government in view of the retrospective amount as per section 97 of Finance Act, 1994 the demand for interest cannot be sustained.

5. I have considered submissions on both sides. I find merit in the argument of the counsel for the appellant. When the demand for main amount itself is not sustainable, demand for interest

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cannot be sustained for the reason that appellant had paid amount which was not legally due. Appellant should get relief at least in respect of the interest amount not yet paid. Therefore, I set aside the impugned order of the Commissioner (Appeals) in so far as it upholds demand of interest of Rs.1,21,011/-. The appeal is allowed.