GENERAL MANAGER, BSNL Vs. COMMISSIONER OF CENTRAL EXCISE

JUDGEMENT

(1.) THE appellants viz. M/s. Bharat Sanchar Nigam Ltd. (BSNL, for short) are a Public Sector Undertaking of the Central Government since 1st October, 2000 and have produced the requisite clearance from the 'Committee on Disputes'. The appeal is against a demand of interest of Rs. 1,43,950/ - on an amount of service tax belatedly paid by the party on 18.10.2002 for the period from October, 2000 to May, 2002. The interest was demanded under Section 75 of the Finance Act, 1994, which reads as under:

(2.) IN the present appeal, it is stated that, as the short -payment of service tax for the above period was on account of an error in calculation and not by way of suppression and the short -paid tax was willfully paid as soon as the error was detected, the lower authorities ought not to have demanded interest on the differential tax. It is submitted that the appellants had no mens rea in the above matter so as to attract any penal provision. Learned Counsel has reiterated these grounds. It is also submitted that an excess tax payment of Rs. 1,09,759/ - made by the appellants is lying with the department and the same is yet to be adjusted against adjudged dues of the company. I have heard learned SDR also, who submits that the provisions of Section 75 ibid are mandatory and the appellants have an inescapable liability to pay the above interest. After considering the submissions, I find no justification in the stand taken by the appellants. Admittedly, service tax amounting to Rs. 4,59,791/ - remained unpaid for the period from October, 2000 to May, 2002 for whatever reason and the same was paid only on 18.10.2002. Where an amount of service tax which had to be paid at a given point of time during the above period was not paid within the prescribed time and was paid belatedly, the assessee was liable to compensate the Revenue by way of payment of interest. Section 75 ibid made it mandatory for the appellants to pay such interest. That the appellants had no intention to withhold payment of service tax or that the short -payment was occasioned by arithmetical error is no valid consideration insofar as this provision of law is concerned. The liability under Section 75 is not penal as stated by the appellants. It is a civil liability which is inescapable. The appellants say that certain amount of service tax paid in excess remains with the department and that the same is available for adjustment. However, they have not cited any enabling provision of law for adjustment of service tax against a demand of interest. It is also noticed that this plea was not raised before the lower authorities.

(3.) IN the result, the appeal fails and the same is dismissed.