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TMI Blog2024 (3) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... LES SERVICES PVT. LTD., M/S. TENORMAC ENTERPRISES PVT. LTD. AND M/S. NETIZEN ENGINEERING PVT. LTD. (FORMERLY KNOWN AS RELIANCE INFOCOMM ENGINEERING PVT. LTD.) VERSUS COMMISSIONER OF CGST CE, BELAPUR [ 2023 (7) TMI 544 - CESTAT MUMBAI] reliance on placed on the fact that the relief was granted by the Hon ble Bombay High Court in the case of Sodexo India Services Pvt. Ltd. The Hon ble High Court in the said case has clearly observed that there is no provision for using credit in DRC-03 for the purpose of pre-deposit. It is obvious that the relief was granted by the Hon ble High Court in exercise of writ jurisdiction. The Tribunal does not have that liberty. In this background, the decision of the Tribunal in the case of M/s Saphire Cables Services Pvt. Ltd. Ors. cannot be applied to the instant case. The applications seeking admission on the strength of pre-deposit made using through DRC-03 are rejected. M/s Army Welfare Housing Organization are at liberty to file appeal after paying pre-deposit in any permissible manner. X X X X Extracts X X X X X X X X Extracts X X X X ..... der CGST regime. 5. Revenue is of the opinion that no pre-deposit can be made using the said DRC-03 account. 6. Heard both sides. 7. The matter regarding admissibility of payment of pre-deposit using DRC-03 has been subject matter of substantial litigation. Hon'ble High Court of Bombay in the writ petition filed in the case of Sodexo India Services Private Limited vs. Union of India and Ors. reported as 2022 (10) TMI 264 (Bom.) has observed as follows:- "2. Petitioner had, as required under Section 85 of the Finance Act, 1994 read with Section 35F of the Central Excise Act, 1944, made a pre-deposit in cash through Form GST DRC-03. The appeals were accepted and registered and appeal numbers were allotted. Thereafter, petitioner was called for personal hearing and petitioner made submissions on merits of the matter. 3. To petitioner's surprise, all the appeals came to be dismissed without going into the merits of the submissions made by petitioner only on the ground that the pre-deposit made by petitioner while filing the appeal was improper. According to respondent no.3, petitioners could not have made the deposit in the manner they made and, therefore, should be construed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direct Taxes and Customs (CBI & C). From the affidavit filed by Mr. Lal, it appears that many appellants/assessees were paying the pre-deposit under Section 35F of the Central Excise Act, 1944 through service tax challans, whereas few appellants/assessees were using DRC-03 mode under CGST Act, 2017. This, in our view, could be for various reasons. It appears that this problem has been taken up by the CBI & C with the Principal Chief Commissioner, Mumbai CGST & CE Zone by a letter dated 3rd June 2022. The subject itself states "Non-acceptance of pre-deposit paid through Form GST DRC-03 for appeal under Service Tax law-Request for issuance of instructions to accept such payment as no other option available for making the pre-deposit before filing of appeals-reg." Paragraph 2 of the said letter also reads as under : 2. Vide said representation, the party has mentioned in their letter that the numerous appeals have been rejected on the ground that the payment made for pre-deposit mandatory under Section 35F of the Central Excise Act, 1944 through CGST cannot be accepted and hence, the appellants have failed to comply with the provisions of the Central Excise Act, 1944 read with Secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on one hand, the Hon'ble High Court has clearly pointed out that there is not proper provision to accept payment of pre-deposit under Section 35F of the Central Excise Act, 1944 through DRC-03, it has also granted relief in the said case. The said relief is obviously granted on the ground of equity under writ jurisdiction of Hon'ble Allahabad High Court. 9. In terms of the decision of Hon'ble High Court, the CBIC has issued Circular dated 28.10.2022 wherein the following has been clarified:- "It has been brought to the notice of the Board that appeals have been rejected by some Commissioner (Appeals) for non-compliance of pre-deposit requirements as mandated under section 35E of the Central Excise Act. 1944 (CEA) and Section 83 of the Finance Act. 1994 read with section 35E of the CEA, where such payments have been made through Form GST DRC-03 on common GST portal, by holding that it is not a prescribed method of payment of such pre-deposit. The issue has also been referred to the Board by Hon'ble High Court of Mumbai in writ petition No. 6220 of 2022 in the matter of Sodexo India Services Pvt. Ltd Vs Union of India and Ors, with directions to examine and issue suitable inst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nuary 22, 2024 * TPL Plastech Limited vs. Commissioner of Central Excise and Central Goods, Service Tax, Dehradun in Excise Defect Diary No. 50087 of 2023 dated January 22, 2024 * Indra Deve Chhabra vs. Commissioner of Central Excise and Central Goods, Service Tax, Jabalpur in Service Tax Defect Diary No. 51741 of 2023 dated January 22, 2024 * Arit Hotel Private Limited vs. Commissioner of Central Excise & Central Goods, Service Tax, Delhi-I in Defect Diary No. 50134 of 2023 dated January 15, 2024 This view is an harmony with the observation of Hon'ble High Court of Bombay which also states that there is no provision for payment of pre-deposit through DRC-03. 11. Contrary to the above observations, coordinate bench of the Tribunal in the case of M/s Saphire Cables & Services Pvt. Ltd. & Ors. vs. Commissioner of CGST & CE, Belapur 2023 (7) TMI 544-CESTAT MUMBAI has observed as follows:- "7. Therefore, the basic main objective of pre-deposit being prevention of filing of frivolous appeals by putting financial burden on the Appellant and the same being deposited in the Government account, we find no reason to dispute it on the ground that the same is taken out from the cash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... self-assessed output tax as per the return referred to in the said sub-section.'' (Underlined to emphasise) The use of the word in sub-Clause 2 that the credit shall be utilised only for payment of self-assessed output tax had been interpreted as restriction on payment for any other purpose including pre- deposit. But this provision has been deleted and substituted with new Section 41 with effect from 01.10.2022 vide Finance Act, 2022 (6 of 2022). It is interesting to know that the circular in question on which heavy reliance is placed by the Respondent-Department was issued on 20.10.2022 without reference to this amendment or by referring to Rule 108(1) of the CGST Rules, 2017 that prescribes form and provides option for filing of appeals under the CGST Act and not under the Central Excise Act, except observing in the negative that the payment through DRC-03 is not a valid mode of payment under Section 35F of Finance Act despite the fact that Rule 108(1) of the CGST Rules, 2017 permits payment through electronics cash as well as credit ledger, as could be noticed from para 2 of the Circular/Instructions of CBEC dated 28.10.2022 itself. This being the fact on record, we would g ..... X X X X Extracts X X X X X X X X Extracts X X X X
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