Case Law Details
Vandana Global Ltd. Vs Commissioner (CESTAT Delhi)
The appellant had paid the amount of pre-deposit at the rate of 10% of duty and penalty while filing appeal before the CESTAT over and above the 7.5% thereof as was paid while filling appeal before Commissioner (Appeals) against Order-in-Original No.115/Refund/AC/RD-I/2017 dated 10.04.2018 pursuant to the Show Cause Notice dated 27.06.2013 in terms of Circular No. 984/8/2014 dated 16.09.2014. As observed from the discussion and the decisions placed on record, it is apparent that said Circular stands superseded vide Circular No.1/5/2015 dated 05.07.2018. The said change has been made in terms of a decision of Hon’ble Delhi High Court in the case of Santani Sales Organization (Supra). It has been held therein as follows:
24. Accordingly, we would allow the present writ petition and set aside the order and direction of the Tribunal that the petitioner must deposit additional 10% of the duty and penalty in dispute for the second appeal to be heard and adjudicated. We would also quash the circular dated 27th April, 2017 issued by the Tribunal. It is directed that the petitioner and others on filing second appeal before the Tribunal are required to deposit 10% of the amount of duty/penalty as confirmed by the first appellate authority inclusive of 7.5% pre-deposit made for the first appeal. 10% would not be in addition to and over and above 7.5% of pre-deposit made for the first appeal. However, contention that Section 35F of the C.E. Act does not apply to service tax appeals and therefore no pre-deposit is required to be made is rejected. In the facts of the case there would be no order as to costs.
In view of the said decision, the first point of adjudication stands decided in the terms that the amount at the rate of 10% of duty and penalties as has to be deposited by the assessee for the appeals before CESTAT shall include the amount of pre-deposit before Commissioner (Appeals). Thus, the aforesaid 10% shall include the 7.5% of the amount of duty and/or penalty involved as was already deposited at the time of first appeal being preferred before Commissioner (Appeals). Hence, at the time of second appeal before Tribunal it shall only be 2.5% of the amount of duty & or penalty that is to be deposited as amount of pre-deposit. However, the fact of the present case is that since the Circular of 2018 was not applicable at the time when the appeal before CESTAT was filed by the appellant in the year 2016-17 and as per the then prevalent provisions the appellant was supposed to deposit 10% of duty and penalty amount without including the amount of pre-deposit made by him before Commissioner (Appeals), that the appellant made a pre-deposit of 17.5%, accordingly.
The said deposit qualifies to be called as pre-deposit under Section 35 F of Central Excise Act. The Larger Bench of this Tribunal also, at the relevant time, vide an Interim Order No. 39/2017 dated 20th April, 2017 reported as 2017 (349) ELT 477 (Tribunal – Larger Bench) had held that under Section 35F of Central Excise Act, 1944 and under Section 129E of Customs Act, 1962 the assessee is required to make separate pre-deposit of 10% of amount of duty confirmed / penalty imposed for preferring a second appeal to Tribunal against the order of Commissioner (Appeals). Keeping in view the said prevalent situation at the time when the appellant herein made a pre-deposit of 17.5%, his refund claim pursuant to setting aside of the demand/ penalty has to be sanctioned with the interest at the said deposit @ 17.5 % of duty and penalty deposited instead of sanctioning the refund of mere 10% of duty and penalty.
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