Mandatory Pre-Deposit

[SHIVKUMAR SHARMA]

Dear Experts

Please Give your Expert advice Whether we can pay mandatory Pre-deposit from our Cenvat credit account while filling the Appeal to the Appealate authority.

SHIVKUMAR SHARMA

[KASTURI SETHI]

Yes because duty paid character remains the same whether it is paid through Cenvat Credit account or cash.

[SHIVKUMAR SHARMA]

Dear Sir

As per our Excise authority the mandatory pre-deposit is required to be made by cash or e-payment only and not by debiting the cenvat account, maintained by us,under cenvat rules ,2004.Under new section 35-F of the central excise act 1944 .Effective from 06/08/2014 you have to only option to made Pre-deposit in cash or E-payment.

Pls.give any reference of authority or case law.

Shivkumar Sharma

[Rajagopalan Ranganathan]

Sir,

Cenvat credit can be used for payment of excise duty which is accounted under minor heading 00380003-basic excise duty. Pre-deposit is to be accounted under minor head "other receipts-00380087. Sub-rule 4 of rule 3 of Cenvat Credit Rules, 2004 indicated what kind of duty can be paid through cenvat credit account. Pre-deposit is not one of them. Therefore you have to pre-deposit only by cash.

[KASTURI SETHI]

In this regard, the CESTAT has issued a Circular No. F. No. 15/ CESTAT/ general/ 2013-14 dated August 28, 2014 which clarified as follows:

• Pre-deposit of the amount of Service tax or Excise Duty or Customs duty can also be made through reversal of CENVAT Credit apart from payment made in cash but Pre-deposit of the penalty amount has to be made in Cash.
• 2010 (10) TMI 279 - CESTAT, MUMBAI, = MANAK MOTI FORGINGS PVT. LTD. Versus COMMR. OF C. EX., AURANGABAD

[YAGAY andSUN]

Dear Shiv Kumar,

 

For your kind information.

 

Regards,

 

YAGAY and SUN

 

F.No.15/CESTAT/General/2013-14
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
WEST BLOCK NO.II, R K PURAM, NEW DELHI

Dated: August 28, 2014

CIRCULAR

Sub: Registration of appeals received on or after 06.08.2014 subsequent to amendment in the Customs Act, 1962, the Central Excise Act 1944 and the Finance Act, 1994- instructions- regd.

As there is confusion of adjustment of Cenvat Credit against mandatory penalty, clarifications have been sought from Competent authority. In absence of any classificatory Circular on the issue, all the DRs/ARs/TOs are directed that the appeals received on or after 06.08.2014 may be registered in following cases:

(i) If the mandatory deposit of duty or penalty, as the case may be, has been made in Cash and evidence thereof is produced at the time of filing appeal.

(ii) If mandatory deposit of duty confirmed is made from CENVAT account and evidence thereof is produced.

(iii) If the appellants have made deposit of the duty assessed subsequently, during investigation and if the same is more than the mandatory deposit as stipulated in the captioned amendments.

Whether further clarification is required the same will be issued after getting a clarification from the competent authority.

(A Mohan Kumar)
Registrar

[KASTURI SETHI]

Sh.Shivkumar Sharma Ji,

I am of the view that the amount of pre-deposit towards duty portion , if made through Cenvat Credit Account, is covered under Rule 3(4)(a) of Cenvat Credit Rules, 2004. This has support from CESTAT's Circular dated 28.8.14 and case law mentioned supra in my reply dated 5.10.15. Any further view from any learned person is always welcome pl.

AI Summary

Debate on Whether Pre-Deposits for Appeals Can Be Made Using Cenvat Credit Under Section 35-F of Central Excise Act A discussion in a legal forum addresses whether mandatory pre-deposits for appeals can be paid using a Cenvat credit account. One participant argues that pre-deposits must be made in cash or e-payment according to Section 35-F of the Central Excise Act, 1944, effective from August 6, 2014. Another participant cites a CESTAT circular allowing pre-deposits via Cenvat Credit for duties, but not penalties. The conversation highlights differing interpretations of the rules, with references to specific circulars and case law supporting both perspectives. Participants seek further clarification from authoritative sources.