2009 (6) TMI 854 - AT - Central Excise

Summary

Issues involved: Allegations of suppression of production of excisable goods, removal without payment of duty, refund of deposits made during investigation, interest on deposits under Section 35F of the Central Excise Act, 1944.

Summary:
The case involved allegations of suppression of production of excisable goods and their removal without payment of duty against four assessees. Pending investigation, the assessees deposited amounts towards likely duty liability. The lower authorities confirmed demands and imposed penalties, which were later vacated by the Commissioner (Appeals). The assessees claimed refund of deposits made during investigation and under Section 35F of the Act. The Commissioner (Appeals) sanctioned interest on the deposits beyond three months of the Tribunal's remand orders. Both Revenue and assessees appealed before the Tribunal.

The assessees sought interest from the date of the Tribunal's remand order, while the Revenue contended interest should be paid only from three months after the final disposal of the case in favor of the assessees. Various appeals were filed regarding interest on pre-deposit from the date of the CESTAT Order.

The appellants relied on case laws to oppose the Revenue's appeal, citing instances where interest on delayed refund of pre-deposit was allowed upon obtaining a remand order. The Tribunal had previously held that interest on refund of pre-deposit should be granted from the date of the final order passed by the Tribunal.

After considering submissions and case records, it was found that interest on amounts deposited by the assessees should be granted for the period of delay beyond three months of the order vacating the demand, even in cases of remand. The judgments of various High Courts and the Supreme Court supported the impugned orders granting interest on refund of pre-deposit. Consequently, both the appeals by the Revenue and the assessees failed, and the impugned order was sustained. Cross objections by the assessees against the Revenue's appeals were dismissed on merits.