Head Post Master Vs Commissioner of Central Excise & CGST (CESTAT Allahabad)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Allahabad, dismissed an appeal filed by the Head Post Master, Etawah, challenging the levy of interest on delayed payment of service tax. The dispute arose from an order of the Commissioner (Appeals), which had upheld recovery of interest under Section 75 of the Finance Act, 1994, while waiving penalties under Sections 78 and 77(2), considering that the appellant was a government department and there was no evidence of fraud, suppression, or deliberate non-compliance.
The appellant, engaged in providing postal and courier services, was subjected to an inquiry by the Directorate General of GST Intelligence (DGGI), Kanpur. During scrutiny of records, it was found that service tax amounting to Rs. 33,35,261 had not been paid for the period from April 2014 to June 2017. It was also noticed that ST-3 returns for the period had not been filed. Consequently, a show cause notice dated 30.10.2019 was issued proposing recovery of unpaid service tax, interest, and penalties.
The adjudicating authority subsequently confirmed a service tax demand of Rs. 10,16,176 for the period October 2016 to June 2017, appropriating the amount already deposited by the appellant. The remaining proposed demand of Rs. 23,19,085 was withdrawn as unsustainable. The authority also ordered recovery of interest under Section 75 and imposed penalties. On appeal, the Commissioner (Appeals) upheld the interest demand but waived penalties under Section 78 and Rule 7 read with Sections 70 and 77(2), noting the absence of fraudulent intent and the appellant’s status as a government department.
