NO FEES IS PAYABLE ON APPEALS RELATING TO REFUND/REBATE OF TAX/DUTY

[Mr. M. GOVINDARAJAN]

Section 86 of Chapter V of Finance Act, 1994 (‘Act’ for brevity) deals with the procedure of filing appeal before Tribunal. Section 86(6) provides the fees payable in filing appeal. The said section provides that an appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, irrespective of the date of demand of service tax and interest or of levy of penalty in relation to which the appeal is made, be accompanied by a fee of,—

• where the amount of service tax and interest demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is five lakh rupees or less, one thousand rupees;
•  where the amount of service tax and interest demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is more than five lakh rupees but not exceeding fifty lakh rupees, five thousand rupees;
• where the amount of service tax and interest demanded and penalty levied by any Central Excise Officer in the case to which the appeal relates is more than fifty lakh rupees, ten thousand rupees;

Section 86 (6A) provides that every application made before the Appellate Tribunal,—

(a)  in an appeal for grant of stay or for rectification of mistake or for any other purpose; or

(b)  for restoration of an appeal or an application,

shall be accompanied by a fee of five hundred rupees.

No fee shall be payable for the appeal filed by the Department and for filing the Memorandum of cross objections.

The issue to be discussed in this article is whether any fee is payable for filing appeal before the Tribunal against the rejection of refund or rebate under the service tax provisions.   The Larger Bench solved this problem in ‘Glyph International Limited V. Commissioner of Central Excise and Service Tax, Noida’ – 2013 (8) TMI 17 - CESTAT NEW DELHI

The appellants filed appeals against rejection of refund/rebate of service tax by Commissioner (Appeals).   The main dispute is about quantum of fees to be charged from the appellants in case of dealing with refund/rebate of service tax. In the following cases it was held that a fee is chargeable on the appeal filed by the assessee against the rejection of refund:

• Orissa Synthetics V. Commissioner of Central Excise, Bhubaneshwar’ – 1995 (5) TMI 139 - CEGAT, CALCUTTA;
• Hindustan Zinc Limited V. Commissioner of Central Excise’ – 2006 (2) TMI 163 - CESTAT (Bangalore)
  

In the following cases it was held that no fee is chargeable on the appeal filed by the assessee against the rejection of refund:

• Morarjee Textiles Limited V. Commissioner of Central Excise’ – 2009 (8) TMI 791 - CESTAT, MUMBAI;
• Taksal Pharma Private Limited V. Commissioner of Central Excise’ – 2007 (8) TMI 121 - CESTAT, MUMBAI

Since there are diversified views in this regard the Larger Bench is constituted for taking the decision in this matter.

The Larger Bench found that the provisions relating to charging of fees in Customs, Central Excise and Service Tax are identical.   Since appeals filed by the appellants are in respect of service tax, the Tribunal considered the provisions of Section 86(6) of the Act. The present provisions in Section 86(6) came into effect from 01.11.2004. The Larger Bench also analyzed the provisions of Section 86(6) before 01.11.2004 which read as under:

“An appeal to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner and shall, except in the case of an appeal referred to in sub-section (2) or sub-section (2A) or a memorandum of cross-objections referred to in sub-section (4), be accompanied by a fee of two hundred rupees.”

The Larger Bench held that Section 86(6) clearly speaks of charging of fees in respect of demand of service tax, interest or levy of penalty. For the purpose of levy of fees, appeals pertaining to demand of service tax, interest and levy of penalty are divided into three categories based on amount of service tax, interest or penalty involved in appeal.   Section 86(6) neither talks of refund/rebate nor there is any residuary clause to cover appeals other than the demand of service tax, interest and penalty. The new section of 86(6) restricts charging of fees on appeals involving demand of service tax, interest or levy of penalty only.   Whereas the provisions before 01.11.2004 provides for levy of fees of Rs.200/- for all type of appeals. Therefore appeal for refund also is liable to pay a fee of Rs.200/-.

The Larger Bench, therefore, held that in view of the clear provision in Section 86(6) there is no doubt in holding that no fees is payable on appeals relating to refund/rebate of service tax.   Since the provisions under Section 129A (6) of Customs Act and Section 35B (6) of Central Excise Act are identical, no fees is payable in respect of appeals pertaining to refund of excise duty or customs duty.