TaxTMI 
TaxTMI 
The Taxpayer had deposited 7.5% of Demand before preferring an appeal before Comm.Appeals. The Appeals was disposed in favour of the taxpayer and hence the pre-deposit amount was claimed back from department. The Department aggrieved by the order of the comm. appeals filed appeal before CESTAT which is pending as of date. Now the taxpayer has been served upon a SCN by the original adjudicating authority ( Deputy Comm) , contesting that the comm. Appeal order is improper, incorrect and hence the dept has preferred an appeal before CESTAT , hence the pre-deposit refunded should be paid along with interest till the matter is disposed by the CESTAT. Is SCN Valid , how a lower authority can condemn comm.appeals order and compel the taxpayer to make predeposit. What is recourse to SCN.
Pre-Deposit U/s 35F
13 Jun 2018 
5 Replies 
8789 Views Asked by
Pre-deposit refund protection: Department cannot demand refunded pre-deposit without a stay order; SCN challengeable in court.
Pre-deposit for filing an appeal is a procedural condition and, once an appeal is decided for the assessee, the pre-deposit is refundable with interest; absent a competent stay against the appellate order, the department cannot lawfully demand repayment of the refunded pre-deposit or convert it into an exigible duty, and any show cause notice seeking such recovery is contestable and subject to judicial challenge. (AI Summary)
Pre-deposit for filing an appeal is a procedural condition and, once an appeal is decided for the assessee, the pre-deposit is refundable with interest; absent a competent stay against the appellate order, the department cannot lawfully demand repayment of the refunded pre-deposit or convert it into an exigible duty, and any show cause notice seeking such recovery is contestable and subject to judicial challenge. (AI Summary)