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TMI Blog2022 (9) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... with respect to defect of pre-deposit, it was submitted that there is no defect as requisite pre-deposit of total 10% had already been made. Before the first appellate authority, 7.5% of disputed amount was deposited by way of reversal in GSTR-3B and an additional amount of 2.5% was deposited vide DRC-03 challan. The appellant has submitted copies of the relevant GSTR-3B and DRC-03. 3. Ms Priyanka Rathi, learned Chartered Accountant, appearing for the appellant submits that the finding of the learned Commissioner (Appeals) is erroneous as the Appellant had made pre-deposit of 7.5% of the disputed amount as per section 35F of the Excise Act, by way of reversal of CGST credit, duly reflected in GSTR-3B under Column 4B (2) and that the Appellant was not put to notice of any defect, with respect to the pre-deposit, by the learned Commissioner (Appeals). 4. Learned Chartered Accountant submits that when the matter was listed before the Bench, under defect matters, on 15.06.2022, the Bench directed that appellant to submit a brief note on this legal issue along with relevant case law and that the department should examine the issue of payment of pre-deposit by reversal through CGST cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which he can encash. Debit Entry in ITC should, therefore, be treated as compliance by payment in cash. Reliance has been placed on: * Cadila Health Care Pvt Ltd. v. UOI 2018-TIOL-1236-HC-AHM CX * Manaksia Ltd. v. CCE, Haldia 2017 (354) E.L.T. 415 (Tri. - Kolkata) * Vrinda Engineers Pvt. Ltd. v. CCE Kolkata -II & I 2016 (45) S.T.R. 519 (Tri. - Kolkata) * India Casting Co. v. CEGAT 1998 (104) E.L.T. 17 (All.) * U.O.I. v. Vikrant Tyres Ltd. 1999 (35) RLT 427 (Kar.) * MorarjeeBrembana Ltd. v. CCE 2003 (157) E.L.T. 657 * Kopran Ltd. v. CCE 2005 (188) E.L.T. 431 (Tri. - Mumbai) 7. Learned Chartered Accountant submits in addition that CBIC vide Circular No. 42/16/2018-GST dated April 13, 2018, clarified that the recovery of arrears arising under the existing law shall be made as central tax liability to be paid through the utilization of the amount available in the electronic credit ledger or electronic cash ledger of the registered person, and the same shall be recorded in Part II of the Electronic Liability Register. Further, the Board again vide Circular No. 58/32/2018-GST dated September 04, 2018, issued clarification on the process of recovery of arrears of wrongly av ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 107 (6) of the CGST Act; no error was committed by the appellate authority in rejecting the Petitioner's contention that the ECRL could be debited for the purposes of making the payment of pre-deposit; the prayer of the Petitioner that the debiting of the ECRL made by it should be reversed is a separate cause of action for which the Petitioner should independently seek appropriate remedies in accordance with law and that the making of the pre-deposit by the Petitioner is not contingent upon the above reversal of the debit entry in the ECRL. 10. Learned Authorised Representative submits that the appellant has relied upon an interim order No. 105/2018 of Bangalore Tribunal in Dell International Services India Ltd., wherein the Tribunal allowed pre-deposit made through CGST credit. The decision of the Tribunal is an interim order and since there are conflicting decisions of the Tribunal and the High Court, on this issue, had held otherwise, the decision of the High Court would prevail. 11. Learned Chartered Accountant for the appellant submits that the contentions raised by the Department are devoid of any merit and are untenable. Reliance upon the Jyoti construction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aking re-credit of the amount debited from the Electronic credit ledger for payment of pre-deposit in terms of Rule 86 (4A). Though the decision of the Tribunal in Dell International is an interim order, the same has conclusively determined the rights of the parties with respect to payment of pre-deposit and as such the issue that was required to be decided in the said interim order stands determined. Further, the Department has itself, in the same decision accepted the fact of payment of pre deposit of erstwhile matters from the GST Credit. Thus, without challenging the said determination made in the interim order, the Department cannot be permitted to contend to the contrary. 15. Learned Chartered Accountant also submits that other Benches of the Tribunal also have allowed the payment of pre-deposit through GST Credit. In Cargill Business Service India Pvt. Ltd, Registry accepted the application wherein pre-deposit was made through GST credit and that grave prejudice would be caused if the Appellant is singled out and denied the opportunity to make pre-deposit through credit ledger. 16. Learned Chartered Accountant submits lastly that without prejudice, the learned Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 2(82) of the OGST Act could be equated to the pre-deposit required to be made in terms of Section 107 (6) of the OGST Act. Further, as rightly pointed out by Mr. Mishra, learned ASC, the proviso to Section 41 (2) of the OGST Act limits the usage to which the ECRL could be utilised. It cannot be debited for making payment of pre-deposit at the time of filing of the appeal in terms of Section 107 (6) of the OGST Act. It is not therefore possible to accept the plea Section 107 (6) of the OGST Act is merely a "machinery provision". 21. In Dell International Services India Pvt. Ltd., the Tribunal accepted the contention of the appellant as learned authorized representative did not dispute that mandatory pre deposit can be made through the CGST Credit. Accordingly, the Tribunal held that mandatory pre deposit can be made through the CGST Credit. As pointed out by the learned authorized representative, in the instant case, the said order of the Tribunal in the Dell International India Services Pvt. Ltd. was an interim consent order. Moreover, the judgment of Orrisa High Court in the Jyoti Construction considered the provisions of CGST Act and held that CGST Act has no provision for ..... X X X X Extracts X X X X X X X X Extracts X X X X
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