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TMI Blog2022 (9) TMI 131X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso to the unamended section 35F that the amount is determined towards pre-deposit. On the other hand, it is the amended section 35F that requires the appellant to deposit 7.5% of the duty. In the present case, the amount was deposited by the respondent pursuant to the directions issued under the unamended provisions of the 35F. Such being the position, interest on delayed refund of amount would continue to be governed by the unamended provisions of section 35FF. It is not in dispute that if the unamended provisions of section 35FF are applicable to the facts of the present appeal, no interest would be payable to the respondent since the amount was refunded within three months from the date of communication of the order. Appeal allowed. - SERVICE TAX APPEAL NO. 50935 OF 2021 WITH SERVICE TAX CROSS OBJECTION NO. 50556 OF 2021 - FINAL ORDER NO. 50806/2022 - Dated:- 2-9-2022 - MR. DILIP GUPTA, PRESIDENT AND MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) Shri Harshvardhan, Authorized Representative for the Department Shri Puneet Agarwal, Shri Yuvraj Singh and Shri Chetan Kumar Shukla, Advocates for the Respondent ORDER The Department has filed this appeal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ards pre-deposit with interest. The Assistant Commissioner, by the order dated 12.09.2019, sanctioned refund of Rs. 10,13,90,100/- but interest on this amount was denied. The respondent preferred an appeal before the Commissioner (Appeals) for grant of interest and, as noticed above, the appeal was allowed holding that interest should be paid under the provisions of section 35FF, as amended on 06.08.2014. The reason assigned in the said order is that the respondent had deposited an amount equivalent to 7.5% of the total demand of service tax in terms of the order passed by the Delhi High Court and this is the amount contemplated under the amended provisions of section 35F. The Commissioner (Appeals), therefore, held that as the amount was deposited under the amended provisions of 35F, payment of interest on the pre-deposit amount would be governed by the amended provisions of section 35FF. The relevant portion of the order passed by the Commissioner (Appeals) is reproduced below: (i) I find that the appellant have deposited the amount of Rs. 10,13,90,100/- on 28.11.2016 i.e. after enactment of amended Section 35F of the Central Excise Act, 1944 ('the Act'). The proviso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2014 viz. from the date of deposit of said amount . The appeal is allowed in above terms. ( emphasis supplied ) 7. It is this order dated 05.02.2020 passed by the Commissioner (Appeals) that has been assailed by the Department before the Tribunal on the ground that the provisions of the unamended 35FF would be applicable for payment of interest and not the amended provisions of section 35FF. 8. To appreciate the submission advanced by the learned authorized representative appearing for the Department and the learned counsel for the respondent, it would be necessary to reproduce the relevant portions of the unamended and the amended provisions of sections 35F and 35FF of the Excise Act and they are as follows: Section 35F prior to 6.8.2014 35 F: Deposit, pending appeal, of duty demanded or penalty levied.- Where in any appeal under this Chapter, the decision or order appealed against relates to any duty demanded in respect of goods which are not under the control of Central Excise authorities or any penalty levied under this Act, the person desirous of appealing against such decision or order shall, pending the appeal, deposit with the adjudicating authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ** Section 35FF prior to 6.8.2014 35 FF: Interest on delayed refund of amount deposited under the proviso to section 35F. Where an amount deposited by the appellant in pursuance of an order passed by the Commissioner (Appeals) or the Appellate Tribunal (hereinafter referred to as the appellate authority), under the first proviso to section 35F, is required to be refunded consequent upon the order of the appellate authority and such amount is not refunded within three months from the date of communication of such order to the adjudicating authority, unless the operation of the order of the appellate authority is stayed by a superior court or tribunal, there shall be paid to the appellant interest at the rate specified in section 11BB after the expiry of three months from the date of the order of the appellate authority, till the date of refund of such amount. Section 35FF post 6.8.2014 35 FF: Interest on delayed refund of amount deposited under section 35F. Where an amount deposited by the appellant under section 35F is required to be refunded consequent upon the order of the appellate authority, there shall be paid to the appellant interest at such ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to 06.08.2014) was required to be refunded consequent upon the order of the Tribunal, but if such amount was not refunded within three months from the date of communication of the order to the adjudicating authority, the appellant became entitled to interest at the rate specified in section 11BB of the Excise Act after the expiry of three months from the date of communication of the order of the appellate authority till the date of refund of such amount. 15. The Department contends that since the amount was deposited by the respondent pursuant to an order passed by the Tribunal under the first proviso to the unamended section 35F, it would be the unamended provisions of section 35FF that would be attracted. 16. The respondent, however, contends that the amended provisions of section 35FF would be applicable as the amount towards pre-deposit was deposited on 28.11.2016, which is a date after 06.08.2014 on which date section 35FF was amended. 17. The Commissioner (Appeals) relied upon the order passed by the Delhi High Court on 30.08.2016 to conclude that since the amount towards pre-deposit was determined by taking into consideration the amended provisions of section 35F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 35F would be applicable and so interest would be payable under the amended provisions of section 35FF. This conclusion drawn by the Commissioner (Appeals) is clearly wrong. The High Court, after noticing that learned counsel for the department had admitted that service tax would not be leviable on the contract in issue and the fact that the nature of law had changed w.e.f. 06.08.2014 and having regard to the totality of the circumstances had merely modified the order passed by the Tribunal for pre-deposit of the amount by requiring that an amount equivalent to 7.5% of the total demand should be deposited. The Delhi High Court did not hold that the provisions of amended section 35F would be applicable. 20. Thus, the reasoning adopted by the Commissioner (Appeals) to grant interest under the amended provisions of section 35FF of the Excise Act is not correct and cannot be accepted. 21. Learned counsel for the appellant, however, submitted that even if the unamended provisions of section 35F would apply to the facts of the present case, then too, the respondent would be entitled to interest under the amended provisions of section 35FF, more particularly when the amount towards t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the amended section 35F and not the proviso to the unamended section 35F. Section 35FF, post 06.08.2014, provides that where an amount deposited by the appellant under section 35F is required to be refunded consequent upon the order of the appellate authority, there shall be paid to the appellant interest at such rate, not below 5% and not exceeding 36% on such amount from the date of payment of the amount till of such amount. It is, therefore, apparent that the amended section 35FF deals with amount that is deposited post 06.08.2014 under section 35F and not to any amount that is deposited under the proviso to the unamended 35F. This position is further clarified by the proviso to the amended section 35FF. It provides that the amount deposited under section 35F, prior to the commencement of the Finance (No. 2) Act, 2014, shall continue to be governed by the provisions of section 35FF as it stood before the commencement of the said Act. The proviso, therefore, clearly spells out that if any amount is deposited under the unamended section 35F, it shall continue to be governed by the unamended section 35FF. This is also clear since after section 35F there is a comma and there is a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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