9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (6) TMI 674 - AT - Service TaxRefund of pre-deposit made under section 35 F of Central Excise Act - whether refund of deposit made u/s 35F flows ipsofacto? - rejection of refund on the ground of unjust enrichment, for the reason that the amount in question is an amount of pre-deposit instead of being the amount of duty - presumption of law u/s 12B of CEA - HELD THAT - Irrespective the amount was deposited on the behest of recovery notice of the Department it ultimately was an amount under section 35 F which was to be refunded in terms of section 35 FF and in terms of the aforesaid circulars. The appellant was otherwise held not liable to reverse the credit it being rightly availed. No appeal was filed by the Department against the said order. The issue is otherwise no more res integra. Hon ble Apex Court also in the case of SANDVIK ASIA LIMITED VERSUS COMMISSIONER OF INCOME-TAX AND OTHERS 2006 (1) TMI 55 - SUPREME COURT has held that any amount deposited during investigation pending litigation is ipso facto an amount of pre-deposit and even interest is payable on such amount to the assessee being successful in appeal from the date of deposit till the date of refund. Rejection on the ground of unjust enrichment - HELD THAT - Once it has already been held that the amount in question was an amount of pre-deposit and the amount was not the liability in the form of duty/tax to be paid by the appellant, the question of invoking presumption of section 12 B of Central Excise Act about passing of the incidence of such amount does not at all arise. Section 12B can be invoked if and only if the amount in question is an amount of duty - section 12B has wrongly been invoked by Commissioner (Appeals). He is also observed to have failed to appreciate para 26 (ii) of Circular dated 10th March, 2017. Both the grounds of rejection of the refund of appellant are not sustainable. Commissioner (Appeals) has committed an error while invoking the wrong provisions - Appellant is held entitled for the refund of Rs.2,74,997/- alongwith the interest at the rate of 12% from the date of deposit till the date of realization - Appeal allowed.
Issues:
Refund of pre-deposit under Section 35F of Central Excise Act - Rejection of refund on grounds of recovery notice and unjust enrichment Analysis: The appellant, a taxable service provider, availed and utilized Cenvat Credit in exempted services, leading to a recovery notice. The appellant deposited Rs.2,74,997/-, considered a pre-deposit under Section 35F, which was later found to be rightfully availed credit. The refund claim was rejected citing the recovery notice and the presumption of passing on duty incidence to buyers. The appellant contended that the amount was a pre-deposit and refund was mandatory. Circulars supported the refund claim, emphasizing that pre-deposits need not undergo the duty refund process. The Tribunal held the amount as a pre-deposit and ordered a refund with interest under Section 35FF, citing precedents like Sandvik Asia Ltd. case. The rejection based on unjust enrichment was challenged as the amount was not a duty liability but a pre-deposit. The Commissioner invoked Section 12B incorrectly, as the Tribunal had earlier ruled the appellant was not liable for the amount. Circulars clarified that pre-deposits are not considered duty payments, hence not subject to duty refund procedures. The Tribunal referred to the National Organic Chemical Industries Ltd. case, excluding pre-deposits from unjust enrichment considerations. Consequently, the rejection on unjust enrichment grounds was deemed unsustainable, and the Commissioner's order was set aside. The appellant was granted a refund of Rs.2,74,997/- with 12% interest, to be processed within two months. In conclusion, the Tribunal upheld the appellant's claim for a refund of the pre-deposit amount under Section 35F, rejecting the grounds of rejection based on the recovery notice and unjust enrichment. The decision emphasized the distinction between pre-deposits and duty payments, ensuring the appellant's entitlement to the refund along with interest, in line with legal provisions and precedents.
|
