Order Date: 16 June 2022

Facts: 

• The Appellant, M/s Chowgule Industries Pvt. Ltd., was issued two show cause notices in October, 2006 and November, 2006 demanding Service Tax along with interest under Section 75 and equal penalty under Section 78 of the Finance Act, on dealer’s margin. 
• Appellant made the pre-deposit in compliance with Section 35F. Thereafter, the Appellant preferred an appeal before Cestat and got the desired relief after which it sought for refund of the amount paid in compliance to Order-in-Original.
• The contention of the Revenue is that when the amount is shown in the books of account as expenditure, if would be presumed to have been passed indirectly to another person. 
• The refund request was indirectly denied providing that the same be transferred to the Consumer Welfare Fund established under Section 12C of the Central Excise Act 1944 read with Section 83 of the Finance Act on the ground that Appellant failed to establish that the amount was not unjustify enriched.  
• Aggrieved, the Appellant filed an appeal.

Issues: 

• Whether Rejection of refund claim against pre-deposit, in compliance to Section 35F (Pre 2014 amendment) is maintainable?
  
  Order: 
• The Authorities observed that the amount paid by the Appellant towards discharge of duty along with interest and penalty was in the form of pre-deposit so as to acquire right of appeal and therefore a simple application would be sufficient for the purpose of processing the refund and Appellant would not be subjected to the process of refund of duty as contemplated under Section 11B of the Central Excise Act, 1944. 
• Tribunal relying on the judgement passed by Bombay High Court in the case of Commissioner of Central Excise, Pune-I Vs. Sandvik Asia Ltd held that there is no authority that would show that any amount being shown as expenditure would automatically get credited in the income side as if it is realized from a third party/person.
• Therefore, the appeal was allowed.