Shri Krishna Road Carrier Vs Commissioner of Central Excise & CGST (CESTAT Allahabad)
Customs, Excise & Service Tax Appellate Tribunal (CESTAT), Allahabad, has remanded the case of Krishna Road Carrier v. Commissioner of Central Excise & CGST back to the Commissioner (Appeals) for a fresh decision on merits. The appeal was earlier dismissed due to non-compliance with the mandatory pre-deposit requirement under Section 35F of the Central Excise Act, 1944. The appellant had made the pre-deposit using DRC-03 under the CGST regime, which the Commissioner (Appeals) deemed invalid. However, CESTAT observed that rejecting an appeal solely on procedural grounds, despite the payment being made, denies substantial justice.
The dispute revolved around whether pre-deposit payments under the service tax law could be made using DRC-03 under the CGST Act. CBIC, in its Instruction dated 28.10.2022, had clarified that DRC-03 was not a valid mode of payment for pre-deposit under Section 35F. However, subsequent clarifications, including the CBIC Circular dated 18.04.2023, recognized DRC-03 as a valid payment method for pre-deposits made before the 2022 clarification. This led CESTAT to conclude that the appellant’s pre-deposit should be treated as valid compliance.
Judicial precedents played a key role in this ruling. CESTAT referred to Supreme Court judgments, including Union of India v. V.V.F. Ltd. (2020), which upheld the retrospective effect of clarificatory provisions when they align with legislative intent. Similarly, in Surinder Singh v. Union of India (2016) and W.P.I.L. Ltd. v. CCE, Meerut (2005), the Supreme Court ruled that clarifications merely making explicit what was implicit in the law have retrospective applicability. Additionally, the Bombay High Court in Sodexo India Services Pvt. Ltd. v. Union of India (2022) recognized the confusion over pre-deposit payments and called for CBIC intervention.
