2022 (12) TMI 136 - AT - Service Tax

Grant of proper interest under Section 35 FF of the Central Excise Act - calculation of interest from the date of deposit instead of 3 months after the order of the Tribunal or not - HELD THAT - The order of the Court below is contrary to the provisions of Section 35 FF. The said Section provides for grant of interest from the date of deposit till the date of grant of refund. Accordingly, this appeal is allowed. The impugned order-in-appeal is set aside. Further, this Tribunal allowed the interest @12% per annum, following the ruling of the Division Bench in the case of Parle Agro Ltd. 2008 (3) TMI 67 - CESTAT NEW DELHI - The Adjudicating Authority is directed to grant differential interest from the date of deposit till the date of refund within a period of 60 days from the date of receipt of copy of this order. Application disposed off.

Summary

Issues: Grant of proper interest under Section 35 FF of the Central Excise Act.

In this case, the appellant challenged the grant of interest under Section 35 FF of the Central Excise Act. The appellant had made a pre-deposit during the pendency of the appeal, and upon success in the appeal, requested a refund of the pre-deposit. The Adjudicating Authority granted a refund of the principal amount plus interest at 6% per annum from the date of deposit to the date of refund. The Revenue appealed against the grant of interest from the date of deposit, arguing that interest should have been calculated from 3 months after the Tribunal's order. The Commissioner (Appeals) allowed the Revenue's appeal, directing the Adjudicating Authority to recalculate the interest. The appellant then appealed to the Tribunal, requesting interest at 12% per annum based on a previous ruling in the case of Parle Agro Ltd.

The Tribunal, after considering the contentions, found that the lower court's order was contrary to the provisions of Section 35 FF, which specify interest from the date of deposit to the date of refund. Consequently, the Tribunal allowed the appeal, setting aside the impugned order. The Tribunal also directed the Adjudicating Authority to calculate and grant differential interest at 12% per annum, following the precedent set by the Division Bench in the case of Parle Agro Ltd. The Adjudicating Authority was given 60 days to complete this process from the date of receiving a copy of the Tribunal's order.