Case Law Details
Ramco Cements Ltd. Vs Commissioner of Central Excise (CESTAT Chennai)
The facts are not in dispute. The Revenue in so far as it relates to the payment, has happily accepted the payment without raising any objection even though the same was made under a different head. To put it in simple words, clearly, the appeal before CESTAT was on account of input services tax credit and in terms of the directions of CESTAT the pre-deposit was made under the head ’Excise Duty” and the same was accepted by the Revenue. Only when the benefit of scheme was being availed and consequently refund was claimed, the revenue took an unusual step of denying the same on the ground that the dispute related to service tax whereas the pre-deposit was made under the head ‘’Excise Duty” and hence the same could not be considered for refund. This had the effect of cutting both ways, i.e., loose the payment of predeposit made as also the additional 30% tax in terms of SVLDRS, which is not the purpose or object of any dispute resolution scheme introduced by the Central Government.
When the appellant requested for refund of pre-deposit of Rs. 10.00 Lakhs, nothing prevented the Adjudicating Authority from verifying the same under any other provisions instead of proposing to deny the appellant’s claim by quoting Section 130 (2) of the Finance Act, 2019. This assumes relevance since the appellant never made any claim for refund under SVLDRS scheme. Moreover, the purpose of the scheme in question was settlement of dispute per se and hence, such scheme cannot have the effect of depriving a bonafide litigant of its otherwise eligible refund.
In view of the above, I am of the considered opinion that both the authorities have misdirected in taking recourse Section 130 (2) ibid, which is, as seriously contended by the learned Consultant, is not applicable. Accordingly, the impugned order is set aside and the matter is restored to the file of the Adjudicating Authority to pass a fresh order in accordance with law, after affording reasonable opportunity to the appellant but, without going into the provisions of SVLDR Scheme since, the litigation is settled in so far as the scheme is concerned in respect of the appellant.
FULL TEXT OF THE CESTAT CHENNAI ORDER
The appellant filed a refund claim on 23.12.2019 requesting for the refund of Rs. 10.00 Lakhs paid as pre-deposit pursuant to the Stay Order of CESTAT in Miscellaneous Order No. 40761/2013 dated 21.03.2013. The Assistant Commissioner thereafter issued a Show Cause Notice dated 11.03.2020 proposing, interalia, to reject the same holding to be hit by Section 130 (2) of the Finance Act, 2019. The appellant filed a detailed reply justifying his claim for refund and also urged that the refund was not towards any amount paid under the legacy scheme but related to the pre-deposit made as per the directions of CESTAT. Vide Order-in-Original No. 3/2020 dated 22.06.2020, the Adjudicating Authority has analysed in detail the claim of the appellant, as under:-
> The appellant took Cenvat Credit on inputs, capital goods and input services which were utilized for payment of duty for the clearances of excisable goods.
> On verification of above availment of input service credit in relation to construction of Guest House, Residential Complex, School Building, Vehicle Maintenance and certain services were not covered under Rule 2(l) of the Cenvat Credit Rules, 2004.
> SCN was issued proposing to recover Rs. 15,54,198/-being the credit taken on the above services.
> Order-in-Original No. 2/2010 (ST) dated 22.01.2010 was passed confirming the above demand.
> The same was sustained by the first appellate authority against which an appeal was filed before CESTAT.
> Vide Miscellaneous Order CESTAT directed the appellant to deposit Rs. 10.00 Lakhs as pre-deposit and Final Order was also passed against which the appellant preferred appeal before the Hon’ble High Court of Judicature of Madras.
> During the pendency of its appeal in CAN before the Hon’ble High Court, the appellant choses to avail the benefit of Sabka Viswas Dispute (Legacy) Resolution Scheme (SVLDRS) which was introduced then and accordingly withdrew its appeal and filed application under SVLDRS-1 for settlement of its dispute.
> From its application it was noticed by the designated authority that the pre-deposit made as per the directions of CESTAT related to excise duty as major Head Code and hence the same could not be considered for settling the dispute under the legacy scheme.
> Consequently, 30% of the disputed service tax excluding the above predeposit was arrived at and it was admitted for settling the appellant’s dispute under the scheme.
2. In the O-in-O, the Adjudicating Authority after discussing as above, holds that the appellant was not entitled to the refund since its claim is clearly hit by the provisions of Section 130 (2) of the Finance Act, 2019, since the same barred the refund of any pre-deposit or other deposit which is already paid in excess of the amount payable as indicated in the statement of the designated committee. Being aggrieved, appellant filed the first appeal which was also rejected by the Commissioner (Appeals) vide impugned Order-in-Appeal No.7/2021 dated 10.03.2021 and against this rejection order, the present appeal has been filed before this forum.
3. Heard Shri R. Parthasarathy, learned Consultant for the appellant and Shri Arul C. Durairaj, Supdt., for the Revenue.
4.1 I have considered the rival contentions and also have gone through the documents placed on record. The facts are not in dispute. The Revenue in so far as it relates to the payment, has happily accepted the payment without raising any objection even though the same was made under a different head. To put it in simple words, clearly, the appeal before CESTAT was on account of input services tax credit and in terms of the directions of CESTAT the predeposit was made under the head ’Excise Duty” and the same was accepted by the Revenue. Only when the benefit of scheme was being availed and consequently refund was claimed, the revenue took an unusual step of denying the same on the ground that the dispute related to service tax whereas the pre-deposit was made under the head ‘’Excise Duty” and hence the same could not be considered for refund. This had the effect of cutting both ways, i.e., loose the payment of pre-deposit made as also the additional 30% tax in terms of SVLDRS, which is not the purpose or object of any dispute resolution scheme introduced by the Central Government.
4.2 When the appellant requested for refund of pre-deposit of Rs. 10.00 Lakhs, nothing prevented the Adjudicating Authority from verifying the same under any other provisions instead of proposing to deny the appellant’s claim by quoting Section 130 (2) of the Finance Act, 2019. This assumes relevance since the appellant never made any claim for refund under SVLDRS scheme. Moreover, the purpose of the scheme in question was settlement of dispute per se and hence, such scheme cannot have the effect of depriving a bonafide litigant of its otherwise eligible refund.
5. In view of the above, I am of the considered opinion that both the authorities have misdirected in taking recourse Section 130 (2) ibid, which is, as seriously contended by the learned Consultant, is not applicable. Accordingly, the impugned order is set aside and the matter is restored to the file of the Adjudicating Authority to pass a fresh order in accordance with law, after affording reasonable opportunity to the appellant but, without going into the provisions of SVLDR Scheme since, the litigation is settled in so far as the scheme is concerned in respect of the appellant. All the contentions of the appellant are left open.
(Order pronounced in the open Court on 04.04.2022 )
