Appeal to CESTAT on rejection of Refunds - What is fee payable?
AS per Section 86(6) of the Finance Act, 1994, Section 129A (6) of Customs Act and 35B (6) of Central Excise Act, the fee payable for appeal to CESTAT is
i. Rs. 1000 if the duty/tax, interest and penalty is five lakh rupees or less;
ii. Rs. 5000 if the duty/tax, interest and penalty is more than five lakh rupees but not exceeding fifty lakh rupees;
iii. Rs. 10,000 if the duty/tax, interest and penalty is more than fifty lakh rupees;
But what is the fee payable if the appeal relates to rejection of a refund claim? Here there is no amount of duty demanded or penalty imposed. This issue has been under dispute for more than two decades with different benches of the Tribunal holding different views.
The matter recently reached the Larger Bench of the CESTAT. The Larger Bench observed that Section 86(6) neither talks of refund /rebate nor there is any residuary clause in 86(6) to cover appeals other than the demand of service tax, interest and penalty. The Bench also noted that prior to 01.11.2004 all appeals were chargeable to fees. New Section 86(6) restricts charging of fees on appeals involving demand of service tax, interest or levy of penalty only. The Bench was, therefore, of the view that legislature did not intend to charge any fees in appeals relating to refund/rebate.
The larger Bench held that no fee is payable on appeals relating to refund/rebate of Service Tax. Since provisions under Section 129A (6) of Customs Act and 35B (6) of Central Excise Act, are identical, no fees is payable in respect of appeals pertaining to refund of Excise duty or Customs duty.
Hopefully, end of the debate!