2019 (4) TMI 1554 - AT - Central Excise

Interest on delayed refund of amount deposited under the proviso to Section 35F - Refund of pre-deposit along with interest - Section 35FF of the Central Excise Act, 1944 - HELD THAT - There is no other Deposit other than pre-deposit and hence the issue per se, is nothing but interest on pre-deposit. The date of pre-deposit is 27.07.2006, whereas the Final Order of this Court is dated 22.05.2017. Section 35 FF came into the statute book in 2008 and the same was substituted w.e.f. 06.08.2014. Both the assessee as well as the Revenue have for once agree that Section 35FF applies. When Section 35 FF is invoked, either prior to or post 2014, the only thing it talks of is the refund of the amount deposit, heading remains the same but for the application, with subtle difference. The date of deposit is in 2006 which is prior to 2014 and therefore as per the above proviso the provision of Section 35FF before 2014 amendment shall alone apply, which discernably mandates the payment of interest only if there was a delay beyond three months - the Commissioner (Appeals) has applied correct law and therefore the same does not call for any interference. Appeal dismissed - decided against appellant.

Summary

Issues:
Challenge to denial of interest on pre-deposit under Rule 57AH of Central Excise Rules, 1944 read with Section 11A of Central Excise Act, 1944.

Analysis:
1. The appellant challenged the denial of interest on a pre-deposit of &8377; 5,00,000/- made under an interim stay order while the appeal was pending. The final order set aside the demand against the appellant, leading to a claim for a refund of the pre-deposit along with interest. The Assistant Commissioner sanctioned the refund along with interest as per Section 35FF of the Central Excise Act, 1944.

2. The Revenue appealed contending that interest was only mandated if the refund was not granted within three months from the date of communication of the appellate authority's order. The First Appellate Authority set aside the interest sanctioned by the Assistant Commissioner, leading to the current appeal.

3. During the hearing, the appellant argued that the provisions of Section 35FF were for delayed refunds, while they sought interest on the pre-deposit from the date of deposit. The Revenue supported the First Appellate Authority's decision, citing adherence to the law at the time.

4. The judge noted that the issue revolved around interest on the pre-deposit, with the deposit date in 2006 and the final order in 2017. The judge analyzed the provisions of Section 35FF both before and after the 2014 amendment, emphasizing that interest was to be paid from the date of payment till the refund date post-amendment.

5. The judge found that since the deposit was made before 2014, the earlier provision of Section 35FF applied, requiring interest only in case of a delay beyond three months. As the refund was sanctioned within three months of the final order, the judge upheld the First Appellate Authority's decision, dismissing the appellant's appeal.

This detailed analysis of the judgment highlights the key legal issues, arguments presented, and the judge's reasoning behind the decision, ensuring a comprehensive understanding of the case.