2025-VIL-1386-CESTAT-ALH-ST
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SERVICE TAX CESTAT Cases

Service Tax – Sections 68 and 75 of Finance Act, 1994 – Delayed payment of tax – Demand of interest – Appellant is engaged in providing security services to Atomic Power Station – During course of audit of records of Appellant, department noticed that Appellant has not paid interest on delayed payment of Service Tax – Department issued show cause notice to Appellant, proposing demand of interest for late payment of Service Tax – Commissioner confirmed demand of interest under Section 75 of the Act – Whether impugned order confirming demand of interest for late payment of Service Tax is sustainable – HELD – Undisputedly, there is a delay in payment of service tax for relevant period. Bare perusal of Section 75 of the Act provides that when any person, who is liable to pay service tax as per provisions of Section 68 of the Act, fails to pays service tax, then the person is liable to pay interest at prescribed rate. It is settled proposition in law that interest represents the time value of amount deposited and is to be paid along with amount due. Liability to interest can be contractual or a statutory liability. Case under consideration is concerned with liability to interest created by statute, i.e. statutory liability. Statute lays down that, in case of payment of service after due date, interest for period of delay in payment of tax is required to be paid at prescribed rate. Impugned order carefully examines these aspects and concludes that interest is demandable. Impugned order confirming demand of interest for late payment of Service Tax is sustained – Appeal dismissed
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