'Limitation Not Applicable to Pre-Deposit Refunds': CESTAT Orders 12% Interest from Date of Deposit [Read Order]
The Tribunal awarded 12% interest on the refund amount from the date of deposit
![Limitation Not Applicable to Pre-Deposit Refunds: CESTAT Orders 12% Interest from Date of Deposit [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/05/CBIC-Refund-Integrated-Tax-Paid-Goods-Services-exported-Except-Class-taxscan.jpg "Limitation Not Applicable to Pre-Deposit Refunds: CESTAT Orders 12% Interest from Date of Deposit [Read Order]")
The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the time limitation under Section 11B of the Central Excise Act, 1944, does not apply to refund claims for pre-deposits made under Section 35F of the Central Excise Act. The Tribunal directed the authorities to refund Rs. 16,14,167 along with 12% interest per annum from the date of deposit to...
The New Delhi bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that the time limitation under Section 11B of the Central Excise Act, 1944, does not apply to refund claims for pre-deposits made under Section 35F of the Central Excise Act. The Tribunal directed the authorities to refund Rs. 16,14,167 along with 12% interest per annum from the date of deposit to the appellant.
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Coming to the facts of the present case, the appellant, M/s. Alliance Francaise De Delhi, is an Indo-French cultural centre specialising in French language teaching and cultural events. Show-cause notices were issued in 2009 and 2010, alleging non-payment of service tax under four categories, namely Commercial Trading or Coaching Services, Club or Association Services, Business Support Services, and Renting of Immovable Property Services. The demand was confirmed in an Order-in-Original dated 15.10.2012.
The appellant challenged this order and sought a waiver of the pre-deposit requirement under Section 35F. The Tribunal, in its Stay Order dated 11.11.2013, conditionally waived the pre-deposit, directing the appellant to pay Rs. 9,66,000 plus interest within six weeks. The appellant complied, depositing Rs. 16,14,167- on 19.12.2013.
Later, the Tribunal allowed the appeal on merits on 18.01.2017, setting aside the original order. The appellant then filed a refund claim on 15.02.2023, which was rejected by the authorities as time-barred under Section 11B of the Central Excise Act, 1944. As the rejection was upheld in the Order-in-Appeal, the assessee approached the CESTAT for relief.
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The appellant's counsel argued that the pre-deposit was not a payment of duty but a compliance with the Tribunal's stay order, making Section 11B inapplicable. The counsel cited departmental circulars and judicial precedents, including the Tribunal's recent decision in Barmer Lignite Mining Company Ltd. Vs.Commissioner, CGST, Jaipur,3, which held that amounts deposited during adjudication or investigation are not duty payments.
The bench noted that the pre-deposit was made solely to avail the statutory appeal remedy and could not be treated as a duty. The Tribunal ruled that the refund claim was not subject to the one-year limitation under Section 11B of the Act.
The Tribunal awarded 12% interest on the refund amount from the date of deposit.
The CESTAT, consisting of Binu Tamra (Judicial Member), set aside the impugned order and directed the department to process the refund with interest.
To Read the full text of the Order CLICK HERE
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