The Finance (No. 2) Act, 2014 has also made amendments to Section 355FF and Section 129EE of the Central Excise Act, 1944 and Customs Act, 1962, respectively, to provide for payment of refund along with interest at the prescribed rate (6% notified). Some of the clarifications issued by CBEC on the aforesaid sections are as under:
1)Quantum of pre-deposit:
a)New provisions stipulate payment of pre-deposit [i.e., 10% of the duty or penalty payable in pursuance of the order of Commissioner (Appeals)]. Thus, it has been clarified that in the event of appeal against the order of Commissioner (Appeal), 10% is to be paid on the amount of duty demanded or penalty imposed by the Commissioner (Appeals).
b)In a case where penalty alone is in dispute and penalties have been imposed under different provisions of the Act, the pre-deposit would be calculated based on the aggregate of all penalties imposed in the order against which appeal is proposed to be filed.
2)Payments made during investigation: Payment made during the course of investigation or audit, prior to the date on which appeal is filed (to the extent of 7.5% or 10%, subject to the limit of Rs 10 crores) can be considered as pre-deposit. Further, the date of filing of appeal shall be deemed as date of pre-deposit.
3)Refund of pre-deposit: Pre-deposit cannot be deemed as payment of duty. Hence, process of refund as stipulated under Section 11B of the Excise Act or Section 27 of the Customs Act will not be applicable for refund of pre-deposit. Therefore, where the appellate authority has decided the matter in favour of the appellant, refund alongwith interest should be paid to the appellant within 15 days of the receipt of the letter of the appellant seeking refund.