Pre Deposit

[Guest]

Sir,

Whether Pre - deposit paid by the Assesse can be claimed as refund or adjust against Liability in case where the Assesse had got the Favourable order?

[KASTURI SETHI]

If Govt. dues are pending against the appellant/assessee, the department will appropriate against his liability. Refund in cash will not be paid to him in such situation.

[Guest]

Thanq Sir,

Is it not possible for the Assessee himself to adjust against his Liability in the same way as he avails Input Tax Credit?

[Rajagopalan Ranganathan]

Madam,

According to para 6 of chapter 9 of CBEC's Central Excise Manual,

6. Refund of deposits made under Sec. 35 F of CEA 1944 and Section 129 E of Customs Act 1962

6.1 In such cases, Refund applications under Sec 11B (1) of CEA' 44 or under Sec. 27 (1) of Customs Act 1962 need not be insisted upon. A simple letter from the person who has made such deposit, requesting for return of the amount along with an attested xerox copy of order in appeal or CEGAT order consequent to which the deposit made becomes returnable and an attested Xerox copy of the Challan in Form TR6 evidencing the payment of the amount of such deposit, addressed to the concerned Assistant/Deputy Commissioner Central Excise or Customs, as the case may be, will suffice for the purpose. All pending refund applications already made under the relevant provisions of the Indirect Tax Enactments for return of such deposits and which are pending with the authorities will also be treated as simple letters asking for return of the deposits, and will be processed as such. Similarly, bank guarantees executed in lieu of cash deposits shall also be returned.

It is not provided anywhere in Central Excise Act, 1944 or the rules made therunder adjustment of pre-deposit against liability of the assessee. If you have a favourable order from the appellate authority you can address a simple letter to the concerned authorities to return the deposit.

[Guest]

K K

Thanq Sir.

[YAGAY andSUN]

Please refer Circular No. 993/17/2014-CX New Delhi, dated the 5th January, 2015

[KASTURI SETHI]

Practically the department appropriates.

AI Summary

Pre-deposit adjustment: statute lacks provision to set off deposits against liabilities, refund sought via departmental return procedure. There is no provision in the Central Excise enactments or rules permitting adjustment of a pre-deposit against an assessee's liability; an assessee with a favourable appellate order should request return of the deposit by submitting a simple letter along with an attested copy of the order and the challan evidencing payment, and bank guarantees executed in lieu of cash deposits are to be returned, although the department may in practice appropriate deposits against pending dues.