Whether predeposit is required in case of appeal when there is no demand of duty, Central Excise

[R N Desai]

Dear Experts,

We are 100% EOU. Rule 5 of the CCR, 2004 provides for the refund of Cenvat credit if the manufacturer is unable to utilize the credit accumulated on account of export. Such refund is subject to the safeguards, conditions and limitations as provided vide Notification No. 27/2012-CE (NT) dated 18.06.2012. As per para 2(h) of the said Notification, claimant is required to debit the duty amount from the Cenvat account at the time of filling refund claim. Accordingly, we had debited the duty amount and filed refund claim. The claim was rejected by the Assistant Commissioner. Being aggrieved by the said rejection order, we filled an appeal before the Commissioner (Appeals). Now, we have been informed by the office of the Commissioner (Appeal) that as per Section 35F read with Circular No. 984/08/2014-CX dated 16/09/2014 and Circular No. 993/17/2014-CX dated 05/01/2015, we should deposit 7.5% otherwise the appeal would not be entertained. As per Section 35F, assessee is required to deposit 7.5% of the duty and penalty. In our case as there is no demand of duty or penalty, are we required to deposit 7.5%?

Posts / Replies

[Mahir S]

Yes sir, department is correct in demanding 7.5 % even in cases pertaining to rebate of duty..

The same has already been clarified by the department.

[R N Desai]

Dear Sir,

In the Circular No. 993/17/2014-CX., dated 05.01.2015, it clarified that mandatory pre-deposit is applicable in a situation where drawback, refund or rebate is sanctioned to the assessee but afterwards it is found erroneous. In other words, if the order is passed demanding recovery of drawback, refund, rebate etc. and if the assessee is preferring an appeal against that order, pre-deposit of 7.5% is required before filing an appeal. In our case, the refund is rejected and there is no demand at all. On the contrary, we have debited full amount from Cenvat Account before filling the refund claim.

[YAGAY AND SUN]

In this scenario you're not required to deposit any amount while filing an appeal against the impugned order.