CHENNAI TELEPHONES, BSNL Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) For the purpose of hearing this appeal, the appellant, a PSU unit, and is required to deposit an interest amount of Rs. 48,25,578/ - demanded under Section 75 of the Finance Act, 1994 for the belated remittances of Service Tax for some of the months during the period from August 1994 to September 1998, covering the period from July 1994 to March 2000. The appellant contends that there was no delay on their part in remitting the Service Tax. They have contended that being a part of the Central Govt., Ministry of Communication, they were allowed to deposit the Service Tax directly to the Ministry of Communication and there was a delay from the Ministry of Communication to tremit it to the Ministry of Finance by ten days. Their contention is that there was no delay on their part and it was due to the procedures laid down by various Circulars that the money ought to be transferred through their Ministry. Ld. Advocate, Shri Ignatius, points out to the judgment of Diesel Locomotive Works v. CCE, Allahabad , wherein it was held that dispute between two Ministries of Government of India and money was held by either Ministry, then it is a good ground of waiver of pre -deposit.

(2.) Ld. SDR contested the plea and submitted that the appellant had not transferred the amount to the Ministry of Finance in terms of Circular issued in letter F. No. 149/1/94 -CX, as there is a delay in depositing the Service Tax therefore, interest is leviable under Section 75 of Finance Act. She requests for putting the appellants to terms.

(3.) On a careful consideration, we notice that the Delhi Bench presided by the Hon'ble President, in the case of Diesel Locomotive Works (supra), has held that waiver of pre -deposit is to be granted under Section 35F of CE Act, where money was held up with one Ministry before transfer to the Finance Ministry. In view of this position and the grounds taken up by the appellants, prima facie they have a case for contest and hence we grant waiver of pre -deposit on the entire interest amount confirmed by the authorities. As the amount is very heavy, the prayer for early hearing is accepted. The stay of recovery is granted till the disposal of the appeal. Appeal to come up for early hearing on 15 -10 -03.