Order Date: 29 August 2022

Facts-

• The Appellants, Pappu Construction are engaged in providing mining services to M.P. State Mining Corporation Ltd. 
• Inquiry was initiated by Directorate of Central Excise and it was observed that the appellants have provided taxable service since 1st June, 2007 to 31st March, 2011 at Megnagar Mines of the aforementioned Corporation. However, they neither got themselves registered nor have discharged their service tax liability for the aforementioned period. 
• Accordingly, vide Show Cause Notice Service tax was proposed to be recovered from the appellants for providing taxable mining services. The said proposal was initially confirmed vide Order-in-Original.
• The appellant submitted that Commissioner (Appeals) has wrongly upheld the order of appropriation of the amount of refund of pre-deposit amount against the confirmed duty demand. 
• Appellant contended for refunding the amount of deposits made in terms of section 35 F of Central Excise Act that too within a period of three months from the date of the order of the final authority/ CESTAT. With these submissions, appellant has prayed for the order under challenge to be set aside and the appeal to be allowed.
• Commissioner (Appeals) relied on Circular No.984/08/2014-CX wherein it has been clarified that in case of partial confirmation of demand the adjustments from the deposits can be made. The appeal is accordingly prayed to be dismissed.
• Being aggrieved of the said order the appellant filed an appeal before this Tribunal.

Issue-

• Whether the appellant is entitled for the refund of the amount of pre-deposit?

Order-

• The Tribunal held that it was a mandate upon the Department to sanction the refund of amount as was deposited under Section 35F of Central Excise Act. The adjudicating authorities have committed an error while adjusting the said amount to a confirmed duty demand. 
• The bare perusal makes it clear that even the Circular No.984/08/2014 does not speak about setting off the amount of pre-deposit as made under section 35 F against any partial confirmation of demand - the refund claim irrespective of a confirmation of duty liability has wrongly been rejected.
• The Tribunal held that the appellant is entitled for the refund of the amount of pre-deposit thereof along with the interest at the applicable rate from the date of deposit till the date of realization.
• Hence the appeal filed by the appellant is allowed.