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Pre-deposit provisions in Excise, Customs & Service tax laws clarified

16 September, 2014

Central Board of Excise & Customs (CBEC) has clarified today some of the provisions relating to mandatory pre-deposit for filing appeals and refund thereof in case of favorable order, which were brought into force from 6-8-2014 by Finance (No. 2) Act, 2014. Circular No. 984/4/2014-CX,dated 16-9-2014 issued in this regard specifies simple procedure for making pre-deposit and for claiming refund. It also allows payments made during the course of investigation or audit to be considered as pre-deposit under the relevant provisions.

Refund of pre-deposit within 15 days

Pre-deposit made at the time of filing appeal is to be refunded along with interest to the appellant within 15 days of the receipt of a simple letter seeking such refund. Self-attested photocopies of favorable order and document evidencing payment of deposit are required along with the letter. This refund will have to be made even in cases of remand and irrespective of whether order of the appellate authority is proposed to be challenged by the Department. Further, such refund with interest will be granted unless the order favorable to assessee has been stayed. It has also been clarified that such refund would not be subject to the provisions of Section 11B of Central Excise Act as pre-deposit is not duty.

Amount paid during investigation to be considered as pre-deposit

Payments made prior to filing of appeal like those during investigation or audit will also be considered as pre-deposit under Section 35F of Central Excise Act, 1944 or Section 129E of the Customs Act, 1962. However in case of such payments, date of filing of appeal shall be taken as the date of deposit.

No recovery during pendency of appeal

This Circular also holds that earlier Circular No. 967/1/2013, dated 1-1-2013, which was a major source of concern for assessees as it called for recovery of the amounts due to the Government during the pendency of stay applications or appeals, would not be applicable to appeals filed under the new provisions. It directs officials not to take coercive measures to recover balance amount i.e., the amount in excess of 7.5% or 10% deposited as per new provisions during the pendency of appeal.
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