Answer: First, muscle does not form over body fat. Body fat can be found directly beneath the skin and OVER muscle (this is called subcutaneous), and in the torso region fat can be found between and around your organs (visceral). Building muscle helps with the fat burning process because a pound of muscle burns more calories than a pound of fat (approximately two times more at rest and up to ten times more when exercising intensely).
Therefore, there is a slight advantage when you add a few pounds of lean body mass as opposed to simply losing fat. As you lose weight, you will burn fewer calories during any activity compared to when you were heavier (your body weighs less and is easier to move). This is a major reason for weight loss plateaus and the need to continuously consume fewer calories or do more work in order to maintain progress.
So what's really happening when we talk about building muscle to help burn body fat? The activities you perform to add the muscle (e.g. NASM-style resistance training) are increasing your daily calorie burn, and the addition of a few pounds of lean body mass will also add to your overall energy expenditure.