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2024 (11) TMI 407 - AT - Service TaxEntitlement to make the pre-deposit of Duty, payable under the old Central excise regime, as per the requirement of the section 35F of the Central Excise Act by debiting, the electronic cash ledger under the CGST regime - HELD THAT - We observe that this issue has already been decided by M/s. Jyoti Construction 2021 (10) TMI 524 - ORISSA HIGH COURT wherein it has been held that it is not possible to except the plea of the petitioner that output tax as defined under section 2(82) of the CGST Act could be equated to the deposit required to be made in terms of section 107(6) of the CGST Act. Pursuant to these directions, Central Board of Indirect Taxes and Customs vide Instruction No. 14/2022 dated 28.10.2020 as clarified that payments through DRC-03 under CGST regime is not a valid mode of payment for making pre-deposits under Section 35F of the Central Excise Act, 1944 and Section 83 of Finance Act, 1994 read with Section 35F of the CEA. There exists a dedicated CBIC-GST integrated portal, https //cbic-gst.gov.in which should only be utilized for making pre-deposits under Central Excise Act, 1944 and the Finance Act, 1994. We answer the above framed question in favour of the department and against the appellant. Resultantly, the condition of making payment of amount of pre-deposit in terms of Section 35F remains non-complied with. The matter remains defective. However, in the interest of justice, one more opportunity is given to the appellant to do away the said defect.
Issues:
1. Acceptability of payment made under CGST Act as pre-deposit under Central Excise Act, 1944. 2. Interpretation of section 35F of the Central Excise Act regarding pre-deposit requirements. 3. Applicability of CBIC Circular on payment modes for pre-deposit under Central Excise Act. 4. Compliance with payment requirements for filing a regular appeal. Analysis: The judgment pertains to an appeal against an order dated 21.06.2023, where four defects were identified, including the mandatory deposit of Rs.1,65,606. The appellant argued that the payment made under the CGST Act should be considered as a pre-deposit under the Central Excise Act, relying on Circular No. 42/16/2018-GST and a previous tribunal decision. The department contended that payments under the CGST Act are not acceptable as pre-deposits under the Central Excise Act, citing a High Court decision and a CBIC Circular clarifying payment modes. The central issue was whether the appellant could use the electronic cash ledger under the CGST regime for pre-deposit under the Central Excise Act. The Tribunal referenced a High Court decision from Odisha, which held that output tax under the CGST Act cannot be equated to the deposit required under the Central Excise Act. Despite the appellant citing a previous tribunal decision, the Tribunal noted a subsequent High Court decision and directions issued by another High Court, highlighting the lack of a proper legal provision for accepting pre-deposits through certain payment modes. The Tribunal emphasized the need for clarifications from the CBIC to address the confusion among appellants regarding payment methods for pre-deposits. In light of the above, the Tribunal ruled in favor of the department, stating that the pre-deposit condition under Section 35F remained unfulfilled. However, the appellant was given an opportunity to rectify the defect by providing proof of payment within 30 days. The judgment emphasized the importance of compliance with the prescribed payment methods and directed the registry to proceed accordingly based on the appellant's response. The Tribunal quashed the previous orders and instructed a fresh hearing based on the outcome of the defect rectification. Overall, the judgment underscores the significance of adhering to specific payment requirements for pre-deposits under the Central Excise Act and the need for clarity on acceptable payment modes. It highlights the legal complexities surrounding payment mechanisms and the necessity for clear guidelines to avoid confusion among appellants and ensure procedural compliance.
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