GREENPLY INDUS. LTD. Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE applicant Greenply Industries Ltd. engaged in receiving services from goods transport operators has also filed an appeal under Section 86 of the Finance Act, 1994 challenging the order of the Commissioner (Appeals) dated 30.8.05, which confirmed the demand of interest on delayed payment of service tax, under Section 75 ibid, inflicting penalty under Section 76 ibid, as amended. The main contention is that the ratio of the case of L.H. Sugar Factories Ltd. is squarely applicable to the present issue and hence they are not liable to pay tax. The Apex Court has also affirmed this position in their judgment dated 27.7.05 reported in [2005 (187) ELT 5(SC)].

(2.) LEARNED Counsel for the applicant states that his clients had on their own deposited service tax without even receiving a demand notice from the Department and only thereafter the authorities have started coming up with charges against them through a show cause notice, demanding interest and contemplating penal action. In this context, he emphatically relies upon the case of CCE, Delhi III v. Machino Montell (I) Ltd. wherein it was held that if the duty were deposited before the issue of show cause notice, no penalty would be imposable under Section 11AC nor any interest demandable under Section 11AB of the Central Excise Act. He also points out that though this ratio is adopted for Central Excise law, the same should be applicable in the present situation as well though the subject case very much falls under Service Tax Law. Learned Counsel further relies upon the Supreme Court judgment in the case of Gujarat Ambuja Cements Ltd. v. Union of India which had held that liability So pay interest and penalty on outstanding amounts arise only if dues were not paid within a period of two weeks from order passed by the Supreme Court on 17.11.03.

(3.) LEARNED Authorised Departmental Representative contests these arguments saying that the interest in this case is leviable under Section 75 of the Finance Act, 1994.