CESTAT: Amount Deposited Voluntarily During Investigation Can’t Be Treated As Amount Towards Pre-Deposit


The Delhi Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) in the case Sky Airways Versus Commissioner of Customs, (Appeals) observed and has held that the amount deposited voluntarily during an investigation cannot be treated as an amount towards the pre-deposit as it was not an amount being deposited at the time of the filing of the appeal.
The two-member bench of President, Justice Dilip Gupta and the Technical Member, P.V. Subba Rao has observed that the assessee/appellant could not have asked for the refund of the amount deposited by the appellant voluntarily during the investigation of which the amount had been confirmed and the same is appropriated by the order before the Tribunal in the earlier round of proceedings.
The assessee/appellant has challenged the order rejecting the contention of the assessee that the amount, which was voluntarily deposited by the appellant during the investigation and should be treated as a pre-deposit amount. However, it should be refunded as the appeal filed by the appellant for setting aside the order confirming the demand was allowed and the demand was set aside with a direction to the adjudicating authority to pass a fresh order in the light of the directions being issued by the Tribunal.
On August 3, 2009, a show cause notice was issued to the appellant to show cause why customs duty of Rs. 3,00,82,889 should not be demanded under section 28 of the Customs Act 1982 and the helicopter should not be confiscated under sections 111(d) and 111(o) of the Customs Act 1982; and no fine should be imposed. Thus, the show cause notice was adjudicated upon by an order. Further, the helicopter was confiscated with an option to redeem it after payment of a redemption fine and the demand for duty was confirmed. However, it was appropriated as the appellant had already deposited the amount during investigation.
Earlier, the appellant had filed an appeal before CESTAT and the appeal was heard. The appellant raised an issue regarding the jurisdiction of the Commissioner of Customs (Preventive) to issue the show cause notice. The matter was remanded by the CESTAT to the original adjudicating authority to first decide the issue of jurisdiction.
A refund claim had been filled by the appellant pursuant to the order passed by the Tribunal, contending that it was entitled to a refund of Rs. 3,00,82,889 since the order passed by the adjudicating authority was set aside by the Tribunal. The Assistant Commissioner by order rejected the refund claim.
It was contended by the appellant that the amount deposited voluntarily during the investigation should be treated as the amount towards the pre-deposit was rejected for the reason that it was not an amount being deposited at the time of the filing of the appeal. Also, the Assistant Commissioner that after setting aside the order passed by the Assistant Commissioner, the Tribunal had remanded the matter to the Assistant Commissioner to pass a fresh order with regards to the jurisdiction of the officer for issuing the show cause notice.
However, the Assistant Commissioner also noticed that the Tribunal had also directed the parties to maintain the status quo till the matter was decided afresh pursuant to the order passed by the Tribunal.
While dismissing the appeal, the CESTAT held that the appellant had not deposited the amount towards the pre-deposit. Even after setting aside the order, the Tribunal had appealed against the matter for a fresh adjudication with a direction to the parties to maintain the status quo.