CESTAT: Adjudicating Authority made mistake, no GST Refund right

CESTAT: Adjudicating Authority made mistake, no GST Refund right

A Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has ruled that the Adjudicating Authority made an error by not granting the claim for GST refund due to the pre-deposit, penalty and interest involved.

A refund claim had been filed by M/s. Vandana Global Ltd. is in compliance with this Tribunal's order. An order erasing the Order-in-Appeal which confirmed the show-cause notice demand was passed by the appellate court. The original adjudicating authority initially confirmed the said demand and subsequently appropriated an amount in accordance with Rule 14 of the Cenvat Credit Rules 2004 and Section 11A of the Central Excise Act, 1944.

Furthermore, the interest and the penalty were ordered to be recovered. Nevertheless, when the appellant made a claim for a refund pursuant to the aforementioned final order of CESTAT, the appellant received a refund along with a credit for the pre-deposit. The appellant challenged the order of the original adjudicating authority before Commissioner (A) who also by the order under challenge had rejected the appeal since the refund claim of the appellant was approved only for an amount after recovering the arrears.

In an appearance on behalf of the appellant, it is stated that the appellant had already deposited Rs.7.5percent to the Commissioner (Appeals) when the appeal was filed. Following the appeal, the appellant paid 10percent of duty under Circular No. 984/8/2014 -CX dated 16.09.2014, according to the decision of CESTAT. So the appellant deposited a total of 17.5 percent in duty.

The Coram of Judicial Member Rachna Gupta has ruled that the assesse must deposit a separate pre-deposit of 10percent of the amount of duty confirmed/penalty imposed for filing a second appeal to the Tribunal against the decision of Commissioner (Appeals) under Section 35F of Central Excise Act, 1944 and Section 129E of Customs Act, 1962. Accordingly, if the appellant made a pre-deposit of 17.5percent as a condition to setting aside the demand/penalty, his refund claim for the same has to be sanctioned with an interest increase to 17.5percent of the total duty and penalty, opposed to only sanctioning a refund of 10percent.