2013 (11) TMI 871 - AT - Service Tax

Interest demand - Excess and short duty paid - Refund not claimed for excess duty - Held that - Wherever excess payment has been made, no refund has been claimed because the receiver of the final products has availed CENVAT credit and the duty burden has been passed on by the appellant. Under these circumstances, the question of refund of excess payment of duty does not arise at all - revenue neutrality is not a ground and the interest is liable to be paid. Since no refund of excess payment was admissible to the appellant, obviously the only conclusion prima facie possible would be that the appellant has to pay interest on the short payment - Following decsion of Bayer ABS Ltd. vs. CCE, Vadodara 2010 (9) TMI 904 - CESTAT,AHMEDABAD - stay granted partly.

Summary

Issues: Recovery of interest on short payment, adjustment of excess payment, applicability of High Court decision, refund claim, waiver of pre-deposit

The judgment involves the issue of recovery of interest on short payment made by the appellants in a case where duty paid was found to be in excess for some products and short for others. The appellant sought to adjust the excess payment against the short payment to reduce the liability, citing a significant amount of excess payment and reliance on a High Court decision. However, the respondent argued against such adjustment, emphasizing the appellant's own communication indicating an intention to claim refund for excess payment separately from making good the short payment.

Regarding the applicability of the High Court decision cited by the appellant, the Tribunal analyzed the circumstances and concluded that since excess payments were not refunded due to the availing of CENVAT credit by the receiver of the final products, the question of refund did not arise. The Tribunal also referred to a previous case to establish that interest on short payment was still liable even in cases of revenue neutrality. The Tribunal acknowledged the appellant's argument for a prima facie case based on the High Court decision but deferred a detailed consideration of the same to the final hearing, indicating that total waiver was not established at that stage.

In light of the discussions and considerations, the Tribunal ordered the appellant to deposit a specific amount within a specified timeframe, granting a waiver of pre-deposit for the balance amount and staying the recovery during the appeal's pendency. The judgment highlighted the need for a detailed examination of all facts, circumstances, and statutory provisions at the final hearing to determine the merit of the appellant's case for total waiver.