{"id":3429,"date":"2025-04-16T17:27:35","date_gmt":"2025-04-16T11:57:35","guid":{"rendered":"https:\/\/centaxblogs.taxmann.com\/?p=3429"},"modified":"2025-04-16T17:27:35","modified_gmt":"2025-04-16T11:57:35","slug":"proceedings-for-recovery-of-interest-cannot-survive-once-tax-demand-is-invalidated-and-a-refund-is-ordered-cestat","status":"publish","type":"post","link":"https:\/\/www.centaxonline.com\/blog\/proceedings-for-recovery-of-interest-cannot-survive-once-tax-demand-is-invalidated-and-a-refund-is-ordered-cestat","title":{"rendered":"Proceedings for Recovery of Interest Cannot Survive Once Tax Demand is Invalidated and a Refund is Ordered | CESTAT"},"content":{"rendered":"<pre><strong>Case Details:<\/strong> <a href=\"https:\/\/www.centaxonline.com\/latest-news-updates\/excise-service-tax\/101010000000391343\/proceedings-for-recovery-of-interest-cannot-survive-once-tax-demand-is-invalidated-and-a-refund-is-ordered-cestat\">Deposit Insurance and Credit Guarantee Corporation Versus Commissioner of CGST &amp; Central Excise, Mumbai Central (2025) 29 Centax 154 (Tri.-Bom)<\/a><\/pre>\n<h2><em>Judiciary and Counsel Details<\/em><\/h2>\n<ul>\n<li><strong>S\/Shri C.J. Mathew<\/strong>, Member (T) &amp; <strong>Ajay Sharma<\/strong>, Member (J)<\/li>\n<li><strong>Shri Omprakash Bihari<\/strong>, Chartered Accountant, for the Appellant.<\/li>\n<li><strong>Shri SBP Sinha<\/strong>, Superintendent (AR), for the Respondent.<\/li>\n<\/ul>\n<h2><em>Facts of the Case<\/em><\/h2>\n<p>The assessee, having paid service tax in two tranches based on the Department\u2019s interpretation of \u2018cum-tax\u2019 valuation under the Finance Act, 1994, was later held not liable for such tax in subsequent proceedings. The tax was found to be unrecoverable, and a refund was ordered. Despite this, the Department initiated proceedings to recover interest on the delayed payment of the now-invalidated tax. Challenging this, the assessee filed an appeal before the CESTAT, contending that no interest could be levied once the tax itself was declared without legal authority. The assessee relied on Sections 73, 83A, and 86 of the Finance Act, 1994, to argue that interest liability cannot survive in the absence of a valid tax demand.<\/p>\n<h2><em>CESTAT Held<\/em><\/h2>\n<p>The Hon\u2019ble CESTAT held that when the underlying tax liability is invalidated and a refund is granted, proceedings for recovery of interest cannot be sustained. Observing that the tax payments were made without legal sanction, the Tribunal set aside the interest proceedings in full.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Case Details: Deposit Insurance and Credit Guarantee Corporation Versus Commissioner of CGST&hellip;<\/p>\n","protected":false},"author":5,"featured_media":3443,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[49,51,63],"tags":[],"class_list":["post-3429","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-excise-service-tax","category-news-excise-service-tax","category-est-case-chronicles"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.9 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Proceedings for Recovery of Interest Cannot Survive Once Tax Demand is Invalidated and a Refund is Ordered | CESTAT<\/title>\n<meta name=\"description\" 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