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

The two-member bench of Justice Dilip Gupta (President) and P.V. Subba Rao (Technical Member) has observed that the appellant/assessee could not have asked for the refund of the amount deposited by the appellant voluntarily during investigation, which amount had been confirmed and appropriated by the order before the Tribunal in the earlier round of proceedings.

The appellant/assessee has challenged the order rejecting the contention of the assessee that the amount, which was voluntarily deposited by the appellant during the investigation, should be treated as a pre-deposit amount. It should be refunded as the appeal filed by the appellant for setting aside the order confirming the demand was allowed. The demand was set aside with a direction to the adjudicating authority to pass a fresh order in the light of the directions issued by the Tribunal.

A show cause notice was issued to the appellant on August 3, 2009, to show cause why customs duty of Rs. 3,00,82,889 should not be demanded under section 28 of the Customs Act 1982; the helicopter should not be confiscated under sections 111(d) and 111(o) of the Customs Act; and no fine should be imposed.The show cause notice was adjudicated upon by an order. The helicopter was confiscated with an option to redeem it after payment of a redemption fine and the demand for duty was confirmed. It was, however, appropriated as the appellant had already deposited the amount during investigation.

The appellant had earlier filed an appeal before CESTAT. This appeal was heard. An issue that was raised by the appellants was regarding the jurisdiction of the Commissioner of Customs (Preventive) to issue the show cause notice. The CESTAT remanded the matter to the original adjudicating authority to first decide the issue of jurisdiction.

The appellant had filed a refund claim 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 of the adjudicating authority was set aside by the Tribunal. The refund claim was rejected by the Assistant Commissioner by order.

The appellant contended 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 deposited at the time of the filing of the appeal. The Assistant Commissioner also noted 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 regard to the jurisdiction of the officer to issue the show cause notice.

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.

The CESTAT, while dismissing the appeal, held that the appellant had not deposited the amount towards the pre-deposit. The Tribunal had, even after setting aside the order, appealed against the matter for a fresh adjudication with a direction to the parties to maintain the status quo.

Case Title: Sky Airways Versus Commissioner of Customs,(Appeals)

Citation: Customs Appeal No. 52381 of 2019

Date: 12.08.2022

Counsel For Appellant: None

Counsel For Respondent: Authorised Representative Rakesh Kumar

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