2021 (9) TMI 28 - AT - Service Tax

Refund claim of pre-deposit while appeal is pending - adjustment of amount which was paid in lieu of pre deposit for filing the appeal before this Tribunal - HELD THAT - It is admitted fact that the order confirming proposal of three separate show cause notices for three different periods was confirmed by the common Order-in-Original as well as common Order-in-Appeal. While assailing the said Order-in-Appeal before this Tribunal ₹ 15 lakh were to be paid by the appellant as an amount of pre-deposit, pre-requisite for filing the appeal before this Tribunal in view of section 35F of Central Excise Act, 1944 and section 129E of the Customs Act, 1962. ₹ 9.23 lakh out of said ₹ 15 lakh is payment which was made by the appellant at the investigating stage and as such has been allowed to be considered as a payment towards pre-deposit. Remaining ₹ 5.77 lakh were paid by the appellant during the pendency of his Civil Miscellaneous Application before the Delhi High Court i.e. on 16.5.2016 - Both these amounts ( ₹ 9.23 lakh and ₹ 5.77 lakh) admittedly is an amount toward pre-deposit as was made by filing the appeal before this Tribunal. Since the demand is not yet been confirmed, the appropriation of money of pre-deposit against the proposed demand is highly unreasonable and is rather illegal. The order under challenge is set aside. Commissioner (Appeals) is directed to decide three show cause notices on merits in compliance of the order of remand order dated 20.11.2017 that too within two months from the date of receiving of this order - Appeal allowed.

Summary

Issues:
1. Refund claim of pre-deposit amount for filing appeal before Tribunal.
2. Appropriation of pre-deposit amount against proposed demand.
3. Compliance with Circular No. 984/8/2014 dated 16.9.2014.
4. Adjudication of show cause notices pending.

Issue 1: Refund claim of pre-deposit amount for filing appeal before Tribunal:
The appellant filed a refund claim of ?15 lakhs, paid as a pre-deposit for filing an appeal before the Tribunal. The claim was rejected, leading to the current appeal. The appellant argued that the amount paid during the investigation and additional amount directed by the High Court should be considered as a pre-deposit. The Tribunal observed that both amounts (?9.23 lakh and ?5.77 lakh) were indeed pre-deposits made for filing the appeal. As the appeal was allowed by remand, the appellant was entitled to a refund of the pre-deposit amount as per statutory provisions.

Issue 2: Appropriation of pre-deposit amount against proposed demand:
The Tribunal noted that the three show cause notices were pending adjudication, and the demand had not been confirmed. Therefore, appropriating the pre-deposit amount against the proposed demand was deemed unreasonable and illegal. The Commissioner (Appeals) failed to comply with the Tribunal's order of remand within a reasonable time. Consequently, the order under challenge was set aside, directing the Commissioner to decide on the show cause notices within two months from the date of the current order.

Issue 3: Compliance with Circular No. 984/8/2014 dated 16.9.2014:
The Tribunal referred to Circular No. 984/8/2014, emphasizing the entitlement of the appellant to a refund of the pre-deposit amount. The Commissioner (Appeals) was found to have ignored the circular and statutory provisions. The Tribunal held that the demand not being confirmed yet, the appropriation of the pre-deposit amount was unreasonable and against the law.

Issue 4: Adjudication of show cause notices pending:
The Tribunal directed the Commissioner (Appeals) to decide on the three pending show cause notices on merits in compliance with the remand order dated 20.11.2017 within two months of receiving the current order. The impugned order was set aside, and the appeal was allowed, emphasizing the appellant's entitlement to the refund of the pre-deposit amount.

This detailed analysis of the judgment covers all the issues involved comprehensively, highlighting the key legal arguments and decisions made by the Tribunal.