2000 (3) TMI 125 - AT - Central Excise

Summary

Issues:
Refund of pre-deposit amount with interest under Section 35F of the Central Excise Act.

Analysis:
1. The applicants made pre-deposits during investigations and succeeded in their appeal. They sought a refund of the deposited amounts along with interest. The Tribunal directed the Commissioner to refund the amounts, but the issue of interest remained unresolved.

2. The Revenue argued that there is no provision in the Central Excise Act or Section 35F for payment of interest on deposits. Citing judgments like Voltas Ltd. and K.S. Steel Works, the Revenue contended that interest is not payable as there was no undue delay in refunding the amounts.

3. The Revenue further argued that deposits under Section 35F are to be retained until the appeal's disposal, and paying interest would be penal in nature, benefiting neither party.

4. In response, the applicants' counsel distinguished previous cases and highlighted judgments like Kuil Fire Works and Oswal Agro Ltd., where courts directed refunds with interest. The counsel argued that these judgments set a precedent for interest payment on deposits made under Section 35F.

5. The Revenue countered that the Tribunal lacks inherent jurisdiction to order interest payment, unlike the High Courts and the Apex Court, whose judgments on interest are binding.

6. After considering the arguments, the Tribunal found merit in the applicants' counsel's submissions, referencing judgments by the Apex Court and High Courts directing interest payment on pre-deposit amounts. The Tribunal held that these judgments, being binding, necessitated the Commissioner to pay interest at 12% per annum from the date of deposit.

7. Consequently, the Tribunal allowed the Misc. application, directing the Commissioner to pay interest on the deposited amounts as per the judgments cited, and set a compliance deadline of three months.

This comprehensive analysis highlights the key arguments presented by both parties and the Tribunal's decision based on relevant legal precedents and interpretations of the Central Excise Act.