2010 (10) TMI 151 - HC - Customs

Refund - any amount deposited during the pendency of an appeal before the High Court or the Supreme Court would also be by way of deposit under Section 129E of the Act and has to be treated as pre-deposit

Summary

Issues:
Challenge to order under Section 130 of Customs Act, 1962 regarding refund-liability, interest liability, and interest-liability on Department.

Analysis:
1. The appellant challenged an order by the Customs, Excise & Service Tax Appellate Tribunal (the Tribunal) under Section 130 of the Customs Act, 1962, raising three questions related to refund-liability and interest liability. The Tribunal remanded the matter to the Commissioner of Customs (Appeals) for further consideration.

2. The case history involved duty demand confirmed against the respondent, subsequent appeals, and payment of the demanded amount by the respondent during the pendency of the appeal before the Supreme Court. The Supreme Court directed the deposit of the amount, leading to further proceedings before the Tribunal and the Adjudicating Authority.

3. The Adjudicating Authority held the respondent liable for differential duty, directing the adjustment of the paid amount against the duty. The matter was appealed before the Commissioner (Appeals) and then the Tribunal, which allowed the appeal.

4. The appellant contended that the amount paid was not a pre-deposit under Section 129-E of the Act, but towards the duty demand, thus requiring a refund claim under Section 27 of the Act. The Tribunal's decision was challenged on these grounds, arguing that the appeal raised questions of law.

5. The main issue revolved around whether the amount paid was a pre-deposit under Section 129-E or towards payment of duty. The provisions of Section 129-E were examined to determine the nature of the payment required for appealing against duty or penalty orders.

6. Section 129-E mandates the deposit of duty, interest, or penalty demanded for entertaining an appeal, without the need for a specific order. The term "pre-deposit" signifies payment before appeal consideration, safeguarding revenue interests.

7. Seeking waiver of pre-deposit due to undue hardship requires an application, but any payment during appeal proceedings falls under Section 129-E, irrespective of a specific order. The argument that only payments under appellate orders qualify as pre-deposits was deemed incorrect.

8. Payments made during appeals to higher courts, including the Supreme Court, are considered pre-deposits under Section 129-E, aligning with the appeal provisions of the Act. Thus, the amount deposited during the Supreme Court appeal was rightfully treated as a pre-deposit.

9. The deposited amount during the Supreme Court appeal was confirmed as falling within the ambit of Section 129-E, qualifying as a pre-deposit. The appellant's contention that it was a duty payment, not a pre-deposit, was dismissed as contrary to the Act's provisions.

10. The Tribunal's decision was upheld, stating no legal errors were committed to warrant interference. No substantial question of law arose from the Tribunal's order, leading to the dismissal of the appeal.