AKILA TEXTILES (P) LTD. AND Vs. CCE

JUDGEMENT

(1.) A demand of service tax was raised on the appellants by the Department in show -cause notice dated 13.8.2002 in respect of goods transport operators' service received by them during the period 16.11.97 to 2.6.1998. This tax was paid on 10.12.2002. The original authority did not charge interest on tax or impose penalty on the party. Its order was revised by the Commissioner, who imposed a penalty of Rs. 26,175/ - on the appellants under Section 76 of the Finance Act, 1994 and also directed them to pay interest on tax under Section 75 of the Act. The present application is in respect of the penalty and interest on tax. S/PD/67/2005 in S/94/2005 A similar demand was raised on the appellants in a show -cause notice dated 8.11.2002 and the noticee paid the tax [with interest thereon] on 10.12.2001. The original authority did not impose any penalty on the assessee. Its order was revised by the Commissioner, who imposed a penalty of Rs. 36,099/ - on the party under Section 76 of the Finance Act, 1994. The present application is in respect of this amount of penalty.

(2.) LEARNED Counsel has submitted that the show -cause notices, which were issued under Section 73 of the Finance Act, 1994, are not maintainable inasmuch as the appellants' case was covered by Section 71A and not by Section 73. It has also been pointed out that, as the tax amounts were paid within the period stipulated by the Hon'ble Supreme Court in order dated 17.11.2003 in the case of Gujarat Ambuja Cements Ltd. v. Union of India final judgment reported in 2005 (182) 33 (SC), the appellants have no liability to pay interest or penalty. I have heard learned SDR also.

(3.) THERE is no contest of the submission that, in a similar case of Gujarat Ambuja Cements Ltd. (supra), the Hon'ble Supreme Court had granted time for payment of service tax dues and it was held that the liability to pay interest or penalty only arose if the dues were not paid within such time. Apparently, in the present cases, the service tax dues were paid within the prescribed period. In the circumstances there will be waiver of predeposit and stay of recovery in respect of the penalty amounts in both the cases and there will be stay of recovery of the interest amount in the case of M/s. Akila Textiles (P) Ltd.