2007 (3) TMI 456 - AT - Central Excise

Summary

Issues involved:
1. Appellant deposited amount towards duty during investigation.
2. Rejection of refund claim by original adjudicating authority and Commissioner (Appeals).
3. Dispute regarding payment of interest on the deposited amount.

Issue 1: Appellant deposited amount towards duty during investigation
The Central Excise officers suspected clandestine clearance by the appellant, leading to the deposit of Rs. 50,000 towards duty. Subsequent proceedings resulted in a confirmed duty of Rs. 1,06,341, which included the deposited amount. The Commissioner (Appeals) observed discrepancies in the order-in-original and modified the lower authority's decision.
Decision: The Tribunal set aside the order, stating that the appellant, having voluntarily paid and deposited the amount, was entitled to a refund along with interest.

Issue 2: Rejection of refund claim
The appellant's refund claim of Rs. 50,000 was initially rejected by the original adjudicating authority and Commissioner (Appeals). However, the Tribunal overturned this decision, granting the refund along with interest as the amount was voluntarily paid and deposited by the appellant.
Decision: The Tribunal directed the payment of the refunded amount to the appellant.

Issue 3: Dispute regarding payment of interest on the deposited amount
The appellant was denied interest on the deposited Rs. 50,000, as it was considered a 'deposit' and not 'duty' by the Revenue. The appellant argued that the amount was treated as duty throughout the adjudication and appellate proceedings. The Tribunal noted that the Revenue had consistently treated the deposit as duty, and since it was paid based on the suspicion of clandestine removal, it should be considered as duty.
Decision: The Tribunal set aside the previous orders, allowing the appeals and directing the Revenue to calculate the interest amount payable to the appellant u/s Section 11B.