2026-VIL-1680-CESTAT-DEL-ST
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SERVICE TAX CESTAT Cases

Service Tax - Imposition of penalty in proceedings for refund of pre-deposit, contrary to a final order of the Tribunal setting aside such penalty - Appellant's pre-deposit made pursuant to a stay order of the Tribunal became refundable following the Tribunal's final order setting aside penalties and part of the demand; in the refund proceedings, however, the adjudicating authority again computed and appropriated penalty and interest against the refund due - Whether the Revenue could, in proceedings for refund of pre-deposit, impose or recover fresh penalties contrary to the Tribunal's final order which had set aside the penalties earlier imposed - HELD - Penalties under Section 78 and Section 76 imposed by the original adjudication order were set aside by the Tribunal's final order, and the demand in respect of Event Management Service was further set aside by the Hon'ble Supreme Court - In refund proceedings seeking refund of pre-deposit made pursuant to the stay order of the Tribunal, the Revenue could not initiate another proceeding for imposition of fresh penalties on the appellant; if permissible in law, they could have proceeded separately, but not within the refund proceedings - Imposition of penalty and its appropriation against the refund due to the appellant, in refund proceedings, is contrary to settled principles of judicial discipline, since the refund claim ought to have been examined strictly in accordance with the order of the Tribunal setting aside the demand - There is no merit in the imposition of penalties and their appropriation against the refund due to the appellant - The matter remanded for re-computation of refund and the interest – The appeal is allowed - Service Tax - Interest on delayed refund of pre-deposit made under Section 35F of the Central Excise Act, 1944 as applied to service tax - Whether interest on refund of pre-deposit made pursuant to an appeal filed prior to the amendment of Section 35F with effect from 06.08.2014 is governed by the unamended or the amended provisions of Section 35FF - Appellant's appeal before the Tribunal was filed on 16.05.2014, prior to the amendment of Section 35F, and pre-deposit was made pursuant to a stay order passed thereafter - HELD - The proviso to the amended Section 35F expressly provides that the amended provisions shall not apply to stay applications and appeals pending before any appellate authority prior to the commencement of the Finance (No.2) Act, 2014 - The relevant consideration for applicability of the amended or unamended provision is not the date of deposit but the provision under which the appeal was pending and the amount was deposited - Since the appellant's appeal was filed and pending prior to the amendment, the refund of the pre-deposit is governed by the unamended provisions of Section 35FF - The refund arising consequent to the Tribunal's order and, further, consequent to the Hon'ble Supreme Court's order setting aside the demand in respect of Event Management Service, the exact amount due, the date from which it is due, and the interest payable thereon require recomputation - The matter is remanded to the original authority for computation of the refund amount due and the interest payable in terms of the unamended provisions of Section 35FF.
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