Pre-Deposit By Appellant Not Payment Of Duty; CESTAT Directs Refund Along With 6% Interest
Pre-Deposit By Appellant Not Payment Of Duty; CESTAT Directs Refund Along With 6% Interest
The Delhi Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has held that the pre-deposit by appellant is not payment of duty but only a pre-deposit for availing the right of appeal and such amount is bound to be refunded when the appeal is allowed.
The bench of Binu Tamta (Judicial Member) has observed that once the appeal is decided in favour of the assessee, he shall be entitled to refund of the amount deposited along with interest at the prescribed rate from the date of making the deposit to the date of refund, irrespective whether the order of the Appellate Authority is proposed to be challenged by the Department or not.
The appellant/assessee is engaged in service of “Clearing and Forwarding” (C&F). A dispute had arisen regarding the inclusion of certain reimbursement expenses such as freight, stationery, printing charges, telephone charges, asset hire, courier, insurance and other taxes while providing Clearing and Forwarding agency services.
A Show cause notice was issued raising a demand and education cess, which was confirmed.
The appeal was disposed of by which the demand towards reimbursement expenses was held to be unsustainable.
The appellant made an application for refund claiming refund as deposited along with 6% interest to be computed from the date of deposit to the date of refund in terms of Section 35 FF of the Central Excise Act, 1944 read with Circular No.984/08/2014-CX dated 16.09.2014.
The application has been rejected by the Adjudicating Authority holding that the amount deposited prior to the date of the stay order is in fact the payment of service tax under the category of C & F Agents of earlier period.
The tribunal has held that the appellant is entitled to refund of Rs.70,400 along with interest @6% from the date of deposit till the date of actual refund is made. The Department is directed to release the amount within a period of 4 weeks.
Case Details
Case Title: M/s. Rishabh Laboratories Limited versus Commissioner of CGST & Central Excise
Case No.: Service Tax Appeal No.50072 of 2024
Date: 27.11.2024
Counsel For Appellant: Parul Sachdeva
Counsel For Respondent: Rohit Issar
