2022 (11) TMI 859 - AT - Central Excise

Refund of amount of interest in addition to amount of duty estimated under SVLDR Scheme - duty liability or not - refund rejected in terms of Section 124 (2) of the Finance Act, 2019 - HELD THAT - A bare perusal makes it clear that provision is not talking about tax dues only as defined under section 123 of the Finance Act, 2019 to be deducted while estimating duty amount to be deposited. But it is talking about any such amount which has already been deposited by the assessee which includes definitely the amount paid as interest - the impugned amount was mandatorily to be deducted from the amount of duty calculated to arrive at estimated amount payable. As apparent from the SVLDR Scheme Form No.3, admittedly the amount of impugned refund has not been deducted while calculating the estimated amount payable by the appellant. It is well settled principle well enshrined under Constitution of India itself Article 362 that no tax can be collected without validity of law. Since the appellant has paid the entire estimated amount payable amount of Rs.17,38,023/- becomes such a deposit with the department for which the Department of Revenue had not authority to retain. The amount payable by the declarant has to be calculated in terms of Section 124(2) i.e. by making a deduction of any amount deposited at any stage prior. From the entire discussion, it becomes abundantly clear that amount in question of Rs.17,38,023/- was to be deducted till the stage of SVLDRS Form No. 2 but was not deducted even at the stage of SVLDRS Form No. 3. Hence, the said amount cannot be covered under proviso to Section 124(2). Thus the said provision is held to have wrongly been applied while rejecting the impugned refund. Similarly, any amount paid under section 130 of Finance Act, 2019 is the amount towards the tax dues as defined under section 123 of the Finance Act, 2019. Hence, it is held that same section 130 has also been wrongly invoked while rejecting the impugned refund. The amount in question is eligible for refund on merits as well as on account of limitation - Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Refund claim rejection under SVLDR Scheme.
2. Interpretation of Section 124(2) of Finance Act, 2019.
3. Statutory period for claiming refund.
4. Admissibility of interest amount as refund.

Analysis:

Issue 1: Refund claim rejection under SVLDR Scheme
The appellant filed a refund claim for an interest amount of Rs.17,38,023/-, which was not considered as duty liability under the SVLDR Scheme. The department proposed rejection of the refund claim, leading to subsequent rejection by the Adjudicating Authority and the Commissioner (Appeals). The appellant contended that the amount was erroneously held to be time-barred and cited relevant legal precedents to support their claim for refund.

Issue 2: Interpretation of Section 124(2) of Finance Act, 2019
The appellant argued that the amount paid as interest should have been deducted while calculating the estimated amount payable under the SVLDR Scheme, as per Section 124(2). The department, however, maintained that the amount in question was not refundable and the refund claim was filed beyond the statutory period of one year. The Tribunal analyzed the provisions of Section 124(2) and determined that the impugned amount should have been deducted from the duty liability, as it was a deposit made by the appellant.

Issue 3: Statutory period for claiming refund
The department contended that the refund claim was time-barred as it was filed beyond the stipulated one-year period. However, the Tribunal considered the nature of the deposit made by the appellant and the provisions of the SVLDR Scheme to determine the admissibility of the refund claim, irrespective of the statutory limitation period.

Issue 4: Admissibility of interest amount as refund
The Tribunal examined the nature of the interest amount deposited by the appellant and its treatment under the SVLDR Scheme. It was observed that the interest amount was not considered as part of the duty liability but was deposited voluntarily by the appellant. The Tribunal held that the interest amount, being a deposit made by the appellant, was eligible for refund and should have been deducted while calculating the estimated amount payable under the SVLDR Scheme.

In conclusion, the Tribunal set aside the order rejecting the refund claim, allowing the appeal in favor of the appellant. The judgment emphasized the mandatory deduction of any amount deposited by the appellant, including interest, while calculating the duty liability under the SVLDR Scheme. The decision highlighted the legal principles governing the refund of revenue deposits and affirmed the appellant's entitlement to the refund along with interest, irrespective of the statutory limitation period.