BPL MOBILE CELLULAR LTD. Vs. CCE

JUDGEMENT

(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: - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Month Amount Rs. Due date Paid date Delay Interest in days - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Total A 23,980.26 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 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.