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October 2011

(2011) 23 STR 212 (Ker.) — Commissioner of Central Excise & Custom, Kochi v. Oriental Steel Trunks Agrico Industries.

By Puloma Dalal, Jayesh Gogri
Chartered Accountants
Reading Time 1 mins
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Interest and penalty — Tax with interest paid before SCN — Tribunal having no jurisdiction to consider matter relating to interest while disposing penalty appeal — Appeal allowed partly.

Facts:
The Tribunal set aside penalty by taking into consideration the payment of service tax along with the interest by the respondent before the issuance of show cause notice (SCN). The Revenue contended that the Tribunal had no authority to discuss about the respondent’s claim for refund of excess interest paid, since the appeal was filed in relation to penalty. The respondent relied on the Circular published by the Department granting time for compliance with statutory provision in regard to payment of service tax.

Held:
The Court allowing the appeal partly, vacated the part of the Tribunal’s order declaring the respondent’s entitlement for refund of interest as interest was not connected with penalty, whereas penalty part was not interfered with.

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