ROCKWOOL INSULATION Vs. CCE, RAJKOT

JUDGEMENT

(1.) THE appellants are engaged in providing construction services and during the period from October 2006 to March 2007, there was a delay in payment of service tax. On the basis of scrutiny of the returns filed by the appellant, the delay was found and even though the appellants paid the service tax along with interest on subsequent dates, the appellant was found to have paid interest less to the extent of Rs. 2,221/ -. Thereafter, the show cause notice was issued to the appellant on 22 -4 -08, proposing to demand service tax and interest and also imposition of penalty. Appellants paid Rs. 4,141/ - on 14 -5 -08, comprising of Rs. 2,221/ - towards interest and Rs. 1,920/ - towards service tax Rs. 1,920/ - was paid because the appellant could not locate reversal entry of Cenvat Credit, which according to them, they had made in their books, but could not give details at that time to the lower authorities. Lower Authorities have held that the penalty under Section 76 is imposable since the service tax and interest was not paid within time.

(2.) LEARNED Chartered Accountant appearing on behalf of the appellant submitted that the appellants had paid full amount of service tax before issue of show cause notice and therefore, the show cause notice should not have been issued and no penalty under Section 76 was imposable in view of the provisions of Section 73(3) of Finance Act, 1994.

(3.) ON the other hand, the learned SDR submitted that the amount of Rs. 4,141/ - was paid only after issue of show cause notice and therefore the appellant is not eligible for benefit of provisions of Section 73(3) of Finance Act, 1994. He also submitted that even now, the appellant is liable to pay Rs. 8/ - towards interest, which has not been paid till date. Therefore, the benefit of provisions of Section 73(3), which provides that no show cause notice can be issued, cannot be extended to the appellant.