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TMI Blog2025 (3) TMI 743X X X X Extracts X X X X X X X X Extracts X X X X ..... ance act 1994 [Finance Act]. The provisions of sections 11B, 11BB, 35F, 35FF have been made applicable to service tax by section 83 of the Finance act, 1994. Section 11B deals with refund of excise duty and when applied to service tax, it deals with refund of service tax. Section 11BB deals with interest on refund under section 11B - vidently, section 11B covers situations where the duty becomes refundable as a consequence of an order or judgment by the Tribunal or any Court which is precisely the case here. The submission of the appellant is that what it had paid was not duty at all because no duty was payable. To examine this submission, what needs to be examined what is the situation under which a duty becomes refundable. If the amount which is paid as duty is due, it will not be refundable at all. If it is not payable as duty, then it becomes refundable under section 11B. Who and what factors will determine if the amount paid as duty was payable or not? - HELD THAT:- This question was dealt with at length by the larger bench of the Supreme Court in ITC LTD. Vs. Commissioner Of Central Excise, Kolkata-Iv [2019 (9) TMI 802 - SUPREME COURT (LB)]. In this judgment, the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the form of a letter which was processed and no new application is required. Only the amount of interest may be recalculated as per section 11BB instead of as per section 35FF.
The impugned order is set aside and the matter is remanded to the Assistant Commissioner. X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal was rejected by the Commissioner(Appeals) through the impugned order. Aggrieved, the appellant filed this appeal. 6. The case of the appellant is that it was never required to pay the amount as Service Tax because there was no liability at all and therefore, the amount which it had deposited during investigation must be treated as 'Revenue deposit' and neither as Service Tax nor as Pre-deposit under section 35F and the Revenue could not have retained the amount and therefore, it must be refunded with interest. According to the appellants, the statutory provisions for interest under section 11BB (on refunds of service tax) or under section 35FF (on amounts made as pre-deposit) do not apply to its case and on the principle of equity, interest should have been paid to it at 12% per annum. Since it was paid only interest @6% per annum, the balance of interest must be paid to it. 7. The fundamental question, which raises in this case is how should an amount which has been deposited as service tax, but which subsequently became refundable, consequent upon an order of the tribunal or courts be treated. Will it be a service tax, pre-deposit or just a revenue deposit? 8. There ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uty Commissioner of Central Excise under the foregoing provisions sub-section shall, instead of being credited to the Fund, be paid to the applicant, if such amount is relatable to - (a) rebate of duty of excise on excisable goods exported out of India or on excisable materials used in the manufacture of goods which are exported out of India; (b) unspent advance deposits lying in balance in the applicant's account current maintained with the Principal Commissioner of Central Excise or Commissioner of Central Excise; (c) refund of credit of duty paid on excisable goods used as inputs in accordance with the rules made, or any notification issued, under this Act; (d) the duty of excise and interest, if any, paid on such duty paid by the manufacturer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (e) the duty of excise and interest, if any, paid on such duty borne by the buyer, if he had not passed on the incidence of such duty and interest, if any, paid on such duty to any other person; (f) the duty of excise and interest, if any, paid on such duty borne by any other such class of applicants as the Centr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The person seeking modification of the assessment has to assail it in an appeal and refund can be sanctioned only after the assessment is modified. Relevant portions of this judgment are reproduced below: "41. It is apparent from provisions of refund that it is more or less in the nature of execution proceedings. It is not open to the authority which processes the refund to make a fresh assessment on merits and to correct assessment on the basis of mistake or otherwise. 42. It was contended that no appeal lies against the order of self-assessment. The provisions of Section 128 deal with appeals to the Commissioner (Appeals). Any person aggrieved by any decision or order may appeal to the Commissioner (Appeals) within 60 days. There is a provision for condonation of delay for another 30 days. The provisions of Section 128 are extracted hereunder : "128. Appeals to [Commissioner (Appeals)]. - (1) Any person aggrieved by any decision or order passed under this Act by an officer of customs lower in rank than a [Principal Commissioner of Customs or Commissioner of Customs] may appeal to the [Commissioner (Appeals)] [within sixty days] from the date of the communication to him of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xecution for refunding amount. It is not assessment or re-assessment proceedings at all. Apart from that, there are other conditions which are to be satisfied for claiming exemption, as provided in the exemption notification. Existence of those exigencies is also to be proved which cannot be adjudicated within the scope of provisions as to refund. While processing a refund application, re-assessment is not permitted nor conditions of exemption can be adjudicated. Re-assessment is permitted only under Section 17(3)(4) and (5) of the amended provisions. Similar was the position prior to the amendment. It will virtually amount to an order of assessment or re-assessment in case the Assistant Commissioner or Deputy Commissioner of Customs while dealing with refund application is permitted to adjudicate upon the entire issue which cannot be done in the ken of the refund provisions under Section 27. In Hero Cycles Ltd. v. Union of India - 2009 (240) E.L.T. 490 (Bom.) though the High Court interfered to direct the entertainment of refund application of the duty paid under the mistake of law. However, it was observed that amendment to the original order of assessment is necessary as the rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n officer of Central Excise lower in rank than the 2[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 35-B, 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) of sub-section (1) of Section 35-B, unless the appellant has deposited ten 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: Provided that the amount required to be deposited under this section shall not exceed Rupees Ten crores: Provided further that the provisions of this section shall not apply to the stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No. 2) Act, 2014. Explanation.-For the purposes of this section "duty demanded" shall include,- (i) amount determined under S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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