Provisions of Section 11B of Central Excise Act not Applicable for Pre-Deposit made u/s 35F: CESTAT [Read Order]

The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) held that provisions of Section 11B of the Central Excise Act, 1944 not applicable for pre-deposit made under Section 35F of the Central Excise Act, 1944.

The appellants are registered with erstwhile Service Tax Commissionerate in Chennai and they have also registered with Tuticorin Division vide RC No. AABCB5758JSE001 of Central Excise and Service Tax Commissionerate, Tirunelveli. The appellants are engaged in the manufacture and export of Garnet and Ilmenite falling under Chapter 25 & 26 of Central Excise Tariff Act, 1985. The appellants (unit in Tuticorin) filed refund claims under Notification No. 41/2012-ST dated 29.06.2012 for the services used in export of the goods and the same were sanctioned.

A Show Cause Notice dated 12.07.2021 was issued to the appellant to show cause as to why the refund claim should not be rejected on the ground of limitation. The appellant filed a reply and explained their case during the personal hearing.

The counsel for the appellant submitted that an appeal was filed before the Commissioner (Appeals), Madurai and an amount of Pre-deposit of Rs.4,80,000/- was paid (under Chennai Registration No. AABCB5758JSE002) on 28.02.2020 and the same was accepted as mandatory pre-deposit by the Commissioner (Appeals), Madurai.

The appellant has contended that it was an admitted fact that the pre-deposit was made in terms of Section 35F of the Act and so, the question of invoking Section 11B of the Central Excise Act to reject the claim of the petitioner as time-barred, does not arise. Further, he has referred to the decision in the case of Estee Auto Pressings (P) Ltd. Vs. Commissioner of Central Excise, Chennai II.

The Authorised Representative has affirmed the findings of the lower Adjudicating Authorities and that pre-deposit amount of Rs.4,80,000/- paid by the appellant has to be treated as an excess payment of duty and so the provisions of Section 11B of the Central Excise Act, 1944 would be applicable. The counsel has argued that the refund-claim filed belatedly cannot be entertained as being hit by limitation.

A Single Member Bench of Vasa Seshagiri Rao, Technical Member observed that “he nature of payment as a pre-deposit would not undergo any change to become excess payment of tax as contended by the lower Adjudicating Authorities. This contention is totally unjustified and has to be termed as patently illegal. There cannot be any doubt as to the payment made being a pre-deposit may be vide their Head Quarter’s Service Tax Registration at Chennai.”

“In view of the above findings and in compliance to judicial discipline and appreciating the decisions cited supra, I am of the considered view that the amount paid by the appellant towards pre-deposit cannot be treated as an excess payment of duty and the provisions of Section 11B of the Central Excise Act, 1944 cannot be made applicable in the facts and circumstances of this case. I find that the appellant is eligible for refund of pre-deposit of Rs.4,80,000/- paid for filing of an appeal under Section 35F of Central Excise Act, 1944” the Tribunal held.

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