2008 (6) TMI 537 - AT - Central Excise

Summary

Issues involved: Dispute regarding payment of interest on pre-deposit amount u/s CESTAT Final Order No. 974, 975/2005 dated 22-6-2005.

Summary:
The appeal arose from Order-in-Appeal No. 102 & 103/2007 (V-I)-C.E., where the Commissioner (Appeals) allowed the assessee's appeal resulting in the return of the pre-deposit amount of Rs. 28 lakhs to the appellants. However, a dispute arose regarding non-payment of interest, leading to a Civil Writ Petition filed in the Hon'ble High Court of Andhra Pradesh. The High Court directed payment of interest in accordance with the Board's Circular and the order of the Hon'ble Supreme Court. The appellants claimed entitlement to interest @ 12% per annum from the date of CEGAT order to the date of appropriation. The Commissioner (Appeals) allowed interest @ 6%, which was challenged by the appellants. They relied on judgments of various courts and tribunals supporting interest rates higher than 6%.

The learned SDR argued that interest should be paid as per the Regulations of the Reserve Bank of India and defended the Commissioner's order fixing the interest rate at 6% per annum. However, the Tribunal noted that previous judgments directed payment of interest at 15% per annum. Considering the submissions and precedents, the Tribunal held that the prayer for interest @ 12% per annum should be granted. The appeal was allowed with the direction to calculate interest at 12% per annum and to pay the balance amount to the assessee within one month from the date of the order.

*(Operative portion of the order has been pronounced in the court on completion of the hearing)*