The Central Board of Indirect Taxes and Customs (‘CBIC’) vide Instruction No. CBIC-240137/14/2022 dated 28 October 2022 has issued directions with respect to pre-deposit payment method for cases pertaining to the Central Excise and Service Tax.

Key points emanating from the Instructions are summarised below:

• Form GST DRC-03 is prescribed for payment of tax, interest, and penalty under various provisions of Goods and Services Tax (‘GST’) law.
• Under the GST law, any payment of pre-deposit for filing an appeal shall be paid through electronic cash/credit ledger in Form GST APL-01. Therefore, Form GST DRC-03 is not a prescribed mode for payment of pre-deposit under GST law.
• Transitional provisions under the GST law also provides that any credit, tax, interest. fine or penalty recoverable under the existing law i.e., Central Excise Act, 1944 and Chapter-V of Finance Act, 1994 shall be recovered as an arrear of tax under Central Goods and Services Tax Act, 2017 (‘CGST Act’). Therefore, pre-deposit being a mere requirement to exercise the right to appeal is neither in the nature of duty nor can be treated as arrears under the Central Excise Act and the Finance Act. Hence, pre-deposit cannot be said to be covered under transitional provisions under the CGST Act.
• Accordingly, Form DRC-03 is not a valid mode for payment of pre-deposit under Section 35F of the Central Excise Act, 1944 and Section 83 of the Finance Act, 1994.
• Payment of pre-deposit under the Central Excise Act, 1944 and Finance Act, 1994 should only be made through dedicated CBIC-GST Integrated portal at https://cbic gst.gov.in.