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2016 (11) TMI 1094 - CESTAT MUMBAI

2016 (11) TMI 1094 - CESTAT MUMBAI - 2016 (337) E.L.T. 315 (Tri. - Mumbai) - Pre-deposit - relief under Rule 41 of the CESTAT (Procedure) Rules, 1982 - if the deposit made under Section 35F can be considered as duty payment against the clearance of goods made earlier - Held that: - the law treats the pre-deposits differently from the duty. In these circumstances it cannot be said that more than 100% duty has been deposited. - application is dismissed. - E/85996/2015-Mum - Misc. Order No. M/87836 .....

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; Service Tax (LTU), Mumbai. By the said order, the Commissioner (Appeals) had ordered recovery of ₹ 33,78,20,452/- through account current under Rule 8(3A) of Central Excise Rules, 2002 read with Section 11A of the Central Excise Act, 1944 and held that the utilization of Cenvat credit was in contravention of Rule 3(4) of the Cenvat Credit Rules, 2004. The applicant approached Tribunal against this order and a show-cause notice was issued by the Registry as to why their appeal should not .....

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-credit of the duty paid to the Cenvat credit account. 2. Learned Counsel for the applicant argued that the applicant had discharged their entire duty liability through Cenvat credit and 7.5% that they have deposited under Section 35F results in 107.5% of duty. The applicant relied on the Circular dated 28-8-2014 issued by the Registrar, CESTAT, wherein it has been clarified as follows : - As there is confusion of adjustment of CENVAT Credit against mandatory penalty, clarification have bee .....

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made deposit of the duty assessed subsequently, during investigation and if the same is more than the mandatory deposit as stipulated in the captioned amendments. 2.1 The learned Counsel also relied on Circular No. 984/8/2014, dated 16-9-2014. The applicant relied on the decision of the Tribunal in case of SNE India Pvt. Ltd. v. Commissioner of Central Excise, Delhi -II - 2014 (305) E.L.T. 161 (Tri.-Del.) where in similar circumstances ordered as follows : - 23. In view of the majority .....

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High Court of Madras in the case of Unirols Airtex - 2013 (296) E.L.T. 449 (Mad.) and has observed as under : - 21. I find that the same view has been taken by Hon ble Gujarat High Court in case of CCE v. Harish Silk Industries, reported in 2013 (288) E.L.T. 74 (Guj.). It is settled law judgment of High Court on a particular issue is binding on the Tribunal. Therefore, notwithstanding the judgments of the Division Bench of the Tribunal in cases of Solar Chemferts Pvt. Ltd. (supra), Meenaksh .....

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mitting the re-credit of the amount debited in Cenvat Credit amount. Moreover, from the language of Rule 8(3A), it is clear that it is a non obstante provision which operates notwithstanding anything contained in sub-rule (1) & sub-rule (4) of Rule 3 of the Cenvat Credit Rules, 2004 and hence provisions of this sub-rule will have overriding effect over the provisions of the Cenvat Credit Rules, 2004. The intention of this sub-rule (3A) of Rule 8 is to punish an assessee defaulting in dischar .....

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e Government. A perusal of the aforesaid decision of Hon ble High Court would show that in case of decision of Hon ble High Court of Madras, there was no mention about re-credit of the amount paid under Section 35F. In case of the decision of Hon ble High Court of Gujarat, it is noticed that the issue regarding re-credit was not challenged by the Revenue. In both the cases, there are no findings regarding availability of re-credit. Moreover, the view of the third Member is also a prima facie vie .....

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ed that in the said decision, there is no reason provided for allowing such re-credit. 2.3 The learned Counsel for the applicant also asserted that the CESTAT is competent to pass such order. For this, they relied on the decision of Hon ble High Court of Madras in case of Madras Electro Casting Pvt. Ltd. - 1994 (71) E.L.T. 646 (Mad.). In Para 8 of the said decision, the Hon ble High Court has observed as under : - 8. In addition to this, it may also be seen as to whether the Customs, E .....

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l may take such orders or give such directions as may be necessary or expedient to give effect or in relation to its orders or to prevent abuse of its process or to secure the ends of justice. The words secure the ends of justice are wide enough to clothe the Tribunal with powers to pass such interim orders, as it may deem fit in the facts and circumstances of the case. In addition to this, the power of Appellate Tribunal to confirm, modify or annul the decision or order appealed against also ta .....

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the purpose of ensuring that the main relief sought in the appeal is available to the party at the end of the proceeding. The fact that Section 129E only provides for relieving the appellant from the undue hardship that would be caused to him in depositing the duty and interest as demanded or penalty as levied, does not in any way take away the inherent power of the Appellate Tribunal to pass such interim orders as are necessary. This is only restated in Rule 41 of the Customs, Excise and Gold ( .....

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of goods if the same are to be confiscated at the end of the proceedings, unless the goods are of such nature which are subject to natural decay or perishable, in such a case, it has to pass appropriate order for disposal. The Counsel for the applicant also pointed out that in a similar case in a miscellaneous application, the Tribunal has earlier modified the said order to allow re-credit in the case of Narmada Offshore & Technical Services Pvt. Ltd. - Order No. M/357/2012/EB/C-II, dated 3 .....

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ction 35F is not duty but the deposit. It was argued by the learned AR that the deposit made under Section 35F and duty paid under the Central Excise Act are two entirely different transaction and one cannot be said to against the other, till the issue is finalized. It was argued that no any cognizance has taken in reversal of the amount paid in Cenvat credit, which was amount for entertainment of the appeal and presumption of the merit of the appeal. It was further argued that as per Circular N .....

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ct of pre-deposit are substantially different. As regards refund of pre-deposit made under Section 35F is concerned, it is covered by Section 35FF. The said deposits do not take the shape of duty till such time the same are adjusted against confirmed duties. So far as refund of duty is concerned, the same is governed by Section 11B and the provisions for the interest and refund are significantly different. The Circular dated 16-9-2014 in Para 5 prescribes the procedure for refund of pre-deposit .....

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ocess of refund of duty under Section 11B of the Central Excise Act, 1944 or Section 27 of the Customs Act, 1962. Therefore, in all cases where the appellate authority has decided the matter in favour of the appellant, refund with interest should be paid to the appellant within 15 days of the receipt of the letter of the appellant seeking refund, irrespective of whether order of the appellate authority is proposed to be challenged by the Department or not. 5.3 If the Department contemplates .....

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nue is collected by adjusting the deposited amount along with interest. 5.6 It is reiterated that refund of pre-deposit made should not be withheld on the ground that Department is proposing to file an appeal or has filed an appeal against the order granting relief to the party. Jurisdictional Commissioner should ensure that refund of deposit made for hearing the appeal should be paid within the stipulated time of 15. days as per para 5.2 supra. 6. Procedure and Manner of making the pr .....

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y deposited. The same may be used for indicating the deposits made under amended Section 35F of the Central Excise Act, 1944 or section 129E of the Customs Act, 1962. 6.4 The appeal filed before the CESTAT are filed along with the appeal memo in prescribed format (Form EA-3 for Central Excise Appeals and Form CA-3 for the Customs Appeals). Column 14(i) of the said appeal forms seeks information of payment of duty, fine, penalty, interest along with proof of payment (challan). These columns .....

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