Bharat Sanchar Nigam Ltd. Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. the revenue has proceeded to recover interest from the appellants on the ground that the appellant, a public sector undertaking, collected service tax along with payment of telephone bills by the telephone subscribers, but delayed in crediting the same to the government of india. it is the appellant's contention that the amounts have been credited to the account of government of india on day to day basis in the cash accounts as per the prescribed procedure/systems of the department of telecom and department of posts. they also contended that the government of india had laid down the procedure for deposits, which had been followed, and it is only the audit office of the central government who had not transferred the same to the central excise office. on account of that delay, they contend that they are not liable to pay interest. the learned counsel appearing for the appellants relied on the tribunal ruling rendered in their own case by final order no. 4/2003, dated 2-6-2003 wherein the tribunal noted the delay in transfer of the amounts from one department to another and held that the appellant was not accountable for such delay.3. we have considered the submissions and note that the tribunal, in para 5 of the appellants' own case, in the cited reference, has held as follows : "5. the appellant is a department of central government. it is bound to make payment including crediting of the amount received from the subscribers towards the telephone charges and service tax in accordance with the directives given by the chief controller of accounts. it is the case of the appellant that they were strictly following the procedure prescribed by dot headquarters in consultation with the principal chief controller of accounts and the central board of excise & customs. this procedure was followed till march 1999. thereafter the general manager is directly crediting the service tax to the book account of the central government under the head 0044 in view of a circular issued in the year 1998. thus the delay caused by the statement being sent to dot headquarters is being avoided. in the peculiar facts and circumstances of this case where the appellant is a central government department and that it had been strictly following the procedure approved by principal chief controller of accounts and which procedure has resulted in the delay and the fact that the amount received from the subscribers were deposited on a day to day basis in the post office to the account of the central government, we find that the appellant cannot be burdened with the liability to pay interest. we make it clear that this view is being taken only in the facts of this case where the delay is caused in depositing the service tax to the specific account of the central government by none other than the department of the central government and also because of the fact that the amount is deposited in the account of the central government on a day to day basis. we, therefore, set aside the order impugned and allow the appeal." 4. in terms of the above ratio, the appellants are not liable to pay interest. furthermore, the board, by f. no. 341/1/2000-tru, dated 20-12-2000 has appreciated the delay in deposit by the telegraph authorities and has withdrawn its earlier circular issued from f. no.149/5/97-cx-4 and issued fresh instructions. in view of this position, the confirmation of interest in the impugned order is not proper and legal and is set aside by allowing the appeal with consequential relief, if any.(operative portion of this order was pronounced in open court on conclusion of hearing)

Judgment:
1. The Revenue has proceeded to recover interest from the appellants on the ground that the appellant, a Public Sector Undertaking, collected Service Tax along with payment of telephone bills by the telephone subscribers, but delayed in crediting the same to the Government of India. It is the appellant's contention that the amounts have been credited to the account of Government of India on day to day basis in the cash accounts as per the prescribed procedure/systems of the Department of Telecom and Department of Posts. They also contended that the Government of India had laid down the procedure for deposits, which had been followed, and it is only the Audit Office of the Central Government who had not transferred the same to the Central Excise Office. On account of that delay, they contend that they are not liable to pay interest. The learned Counsel appearing for the appellants relied on the Tribunal ruling rendered in their own case by Final Order No. 4/2003, dated 2-6-2003 wherein the Tribunal noted the delay in transfer of the amounts from one department to another and held that the appellant was not accountable for such delay.

3. We have considered the submissions and note that the Tribunal, in Para 5 of the appellants' own case, in the cited reference, has held as follows : "5. The appellant is a Department of Central Government. It is bound to make payment including crediting of the amount received from the subscribers towards the telephone charges and service tax in accordance with the directives given by the Chief controller of Accounts. It is the case of the appellant that they were strictly following the procedure prescribed by DOT Headquarters in consultation with the Principal Chief Controller of Accounts and the Central Board of Excise & Customs. This procedure was followed till March 1999. Thereafter the General Manager is directly crediting the service tax to the book account of the Central Government under the head 0044 in view of a circular issued in the year 1998. Thus the delay caused by the statement being sent to DOT Headquarters is being avoided. In the peculiar facts and circumstances of this case where the appellant is a Central Government Department and that it had been strictly following the procedure approved by Principal Chief Controller of Accounts and which procedure has resulted in the delay and the fact that the amount received from the subscribers were deposited on a day to day basis in the Post Office to the account of the Central Government, we find that the appellant cannot be burdened with the liability to pay interest. We make it clear that this view is being taken only in the facts of this case where the delay is caused in depositing the service tax to the specific account of the Central Government by none other than the department of the Central Government and also because of the fact that the amount is deposited in the account of the Central Government on a day to day basis. We, therefore, set aside the order impugned and allow the appeal." 4. In terms of the above ratio, the appellants are not liable to pay interest. Furthermore, the Board, by F. No. 341/1/2000-TRU, dated 20-12-2000 has appreciated the delay in deposit by the Telegraph Authorities and has withdrawn its earlier Circular issued from F. No.149/5/97-CX-4 and issued fresh instructions. In view of this position, the confirmation of interest in the impugned order is not proper and legal and is set aside by allowing the appeal with consequential relief, if any.

(Operative portion of this Order was pronounced in open Court on conclusion of hearing)