Commissioner of Central Goods And Service Tax Vs Toyo Engineering India Pvt. Ltd. (CESTAT Mumbai)
CESTAT Mumbai Awards Compensatory Costs for Harassing Assessee in Refund Dispute; Department Directed to Pay ₹50,000 Costs Over ₹33,373 Pre-Deposit Refund Dispute: CESTAT Mumbai
The CESTAT Mumbai considered an appeal filed by the Department challenging the order of the Commissioner (Appeals), which had allowed refund of a statutory pre-deposit made by the assessee after it succeeded in appeal against the denial of input credit. The dispute centred on whether the refund of the pre-deposit could be denied solely because the amount had been deposited through DRC-03, a challan used for GST matters.
The assessee had availed input credit in respect of services received at branch offices that were not registered under the Service Tax Department. An EA-2000 audit treated the credit as inadmissible, resulting in adjudication confirming a demand of ₹4,44,968 along with interest and penalties. The Commissioner (Appeals), by order dated 31.05.2021, set aside the demand. While filing that appeal, the assessee had made the mandatory pre-deposit of 7.5% under Section 35F of the Central Excise Act, 1944, amounting to ₹33,373, through DRC-03 on 15.05.2021. After succeeding in appeal, the assessee sought refund of the pre-deposit with applicable interest. The Refund Sanctioning Authority rejected the claim solely on the ground that the pre-deposit had been made through DRC-03 instead of the challan prescribed for Service Tax matters.
