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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 ..... with a prayer that interest should be granted on delayed payment @ 12% per annum from the date of deposit till the date of refund. 3. It transpires from the records that a show cause notice dated 30.08.2011 was issued to the respondent demanding service tax with interest and penalty and this demand was confirmed by the adjudicating authority by order dated 30.04.2013. Feeling aggrieved, the respondent filed an appeal before the Tribunal on 05.08.2013. Section 83 of the Finance Act, 19944 makes applicable the provisions of sections 35F and 35FF of the Excise Act to service tax matters. Section 35F, as it stood prior to 06.08.2014, required the person desirous of filing an appeal to deposit the amount demanded under the order against which the appeal was being filed, but the Tribunal could, under the first proviso, dispense with such deposit subject to such conditions as it deemed fit to safeguard the interest of the Revenue. The appellant moved an application before the Tribunal for waiver of pre-deposit and by an order dated 11.05.2016, the Tribunal disposed of the application by directing that a pre-deposit of Rs. 30 crores should be made within a period of eight weeks. 4. This ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the order of the Central Excise and Service Tax Appellate Tribunal (CESTAT) inasmuch as it has granted waiver of pre-deposit to a limited extent. As against the demand for Rs. 130 crores, the stay of pre-deposit was granted to the extent of Rs. 100 crores, this having left the appellant with an obligation to deposit Rs. 30 crores as a pre-condition for hearing its appeal. 3. Learned counsel urged that the nature of contract is such that service tax per se is not leviable. This position is not disputed by the learned counsel for the respondent. It is next contended that having regard to the present nature of law with effect from 6-8-2014, the pre-deposit should not exceed 7½% of the demand. We are of the opinion that having regard to the totality of circumstances, the appellant should deposit an amount equal to 7½%of the total demand, i.e. Rs. 130 crores, within three months. Subject to compliance with the order, the appellant should be heard and its case disposed of on merits." (iii) It is quite clear in the above judgment that the appellant have contended that they must be allowed to pay the pre-deposit as per new Section 35F of the Act. The Hon'ble Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or penalty levied under the first proviso, the Commissioner (Appeals) shall, where it is possible to do so, decide such application within thirty days from the date of its filing. ***** Section 35F post 6.8.2014 "35 F: Deposit of certain percentage of duty demanded or penalty imposed before filing appeal The Tribunal or the Commissioner (Appeals), as the case may be, shall not entertain any appeal - (i) under sub-section (1) of section 35, unless the appellant has deposited seven and a half per cent. of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of a decision or an order passed by an officer of Central Excise lower in rank than the Principal Commissioner of Central Excise or Commissioner of Central Excise; (ii) against the decision or order referred to in clause (a) of sub-section (1) of section 35B, unless the appellant has deposited seven and a half per cent. of the duty, in case where duty or duty and penalty are in dispute, or penalty, where such penalty is in dispute, in pursuance of the decision or order appealed against; (iii) against the decision or order referred to in clause (b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demanded to deposit the duty demanded, but the Tribunal could, under the first proviso, direct for dispensing with the deposit subject to such conditions that the Tribunal deemed fit to impose to safeguard the interest of the Revenue if it was of the opinion that the deposit of duty demanded would cause undue hardship to such a person. 10. The amended provisions of section 35F provide that the Tribunal shall not entertain any appeal unless the appellant deposited 7.5% of the duty in dispute. The second proviso contemplates that the provisions of the section shall not apply to stay applications and appeals pending before the appellate authority prior to the commencement of the Finance Act No. 2 of 2014, i.e. 06.08.2014. 11. It is, therefore, clear that the amended provisions of section 35F will not apply if stay applications and appeals were pending before the Tribunal prior to 06.08.2014. 12. The respondent had filed the appeal before the Tribunal on 05.08.2013 with an application for waiver of pre-deposit. Both the appeal and the stay application were, therefore, pending prior to 06.08.2014 before the Tribunal. It is for this reason that the Tribunal, exercising powers under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hearing its appeal. 3. Learned counsel urged that the nature of contract is such that service tax per se is not leviable. This position is not disputed by the learned counsel for the respondent. It is next contended that having regard to the present nature of law with effect from 06.08.2014, the pre-deposit should not exceed 7½% of the demand. We are of the opinion that having regard to the totality of circumstances, the appellant should deposit an amount equal to 7½% of the total demand, i.e. Rs.130 crores, within three months. Subject to compliance with the order, the appellant should be heard and its case disposed of on merits. 4. The impugned order of the CESTAT is modified to the above extent." (emphasis supplied) 18. It is seen that the Delhi High Court, in the said order, noticed that against the demand of Rs. 130 crores, the Tribunal had granted stay of only Rs. 100 crores, leaving the appellant with an obligation of depositing Rs. 30 crores as a pre-condition for hearing of the appeal by the Tribunal. The Delhi High Court also noticed that w.e.f. 06.08.2014 the provisions of section 35F had been amended to the extent that 7.5% of the demand was requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt Developers vs. Commissioner, Central Excise & CGST, Delhi-South7. 22. It has been found as a fact that the unamended provisions of section 35F would be applicable to the facts of the present case. The unamended provisions of section 35FF of the Excise Act have, therefore, to be examined first to determine whether interest on delayed refund of amount would became payable to the appellant. The 'Heading' of the section is "interest on delayed refund of amount deposited under the proviso to section 35F". A 'Heading' can certainly be regarded as providing a key to the interpretation, for it gives a broad and general indicator of the nature of the subject-matter dealt with thereunder. The appellant had deposited the amount pursuant to an order passed by the Tribunal under the first proviso to section 35F. Thus, on a plain reading of the provisions of section 35F, it is clear that the appellant would be entitled to interest under this section. If that be so, the appellant would not be entitled to any interest since the amount was refunded to the appellant within three months from the date of communication of the order. 23. The contention of the learned counsel for the appellant is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... osition, interest on delayed refund of amount would continue to be governed by the unamended provisions of section 35FF. 26. The decision of the Allahabad High Court Hello Minerals Water, on which reliance has been placed by the learned counsel for the appellant, would not be applicable since in the present case payment of interest is governed by the statutory provisions. The decision of the Allahabad High Court in IFP Products is not applicable to the facts of the case. The view taken by a learned member of the Tribunal in Elegant Developers making applicable the amended provisions of 35FF of the Excise Act, merely because the deposit was made on 06.10.2015, fails to correctly appreciate the provisions of the amended section 35FF. 27. 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 deposited (Sic "refunded") within three months from the date of communication of the order. 28. The Cross Objections filed by the respondent seeking higher rate of interest would have to be rejected since interest itself is not payable to the appellant. 29. Thu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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