The assessee had deposited a sum as service tax with department on audit objection raised. Subsequently, show cause notice was issued demanding payment of service tax along with interest which included the amount deposited at audit objection stage. Demand was later dropped and assessee sought refund of amount deposited by him. Issue for consideration was whether the relevant date for Section 11B of Central Excise Act, 1944 shall be taken as date of deposit of tax or date of adjudication.
Relying on various decisions, the CESTAT in this case of USV Ltd v. CST held that any amount deposited with the department at audit objection stage shall be treated as pre-deposit and refund arising in respect of deposit made during the proceedings shall be refundable as outcome of the adjudication of such demand. Therefore the relevant date in this case for the purpose of refund under Section 11B is the date of the adjudication order and not the date of deposit of service tax.
28 July 2016